Orbitz Taking Trip To Upside?

Orbitz Worldwide, Inc. (OWW) is showing a long setup Friday morning, three days after its annual shareholders meeting that voted on new board members. That shouldn’t act as a huge catalyst for movement. However, we are seeing unusual option activity coming across the tape, as institutional investors are getting long.

Orbitz is a worldwide travel agency that is well known for its advertising campaigns and promises of low prices. Recently, they started an initiative called Orbitz Original which partners with local tourism agencies to showcase all that a given country has to offer with respect to tourism. Recent destinations have included Ireland and Puerto Rico. This is a great new marketing strategy that not only highlights what Orbitz can do to help its customers and all of the insight the company has, but it is also mutually beneficial as it allows countries to showcase their attractions and spur tourism through the online video series. Perhaps moves like this are why people are getting long the travel agency, which has performed almost a point and a half better than the rest of its industry, up 13.5% YTD.

The daily chart is signaling a possible reversal from its recent selloff as it has broken resistance and is trading inside the Ichimoku cloud and testing more upside resistance. Intraday, OWW is trading well above the cloud even with a relatively flat trading day. These are all bullish signals, so let’s look at a trade.


The Trade

Buy Nov 10 calls for .65

Risk: $65 per 1 lot

Reward: Unlimited

Breakeven: $10.65


The Greeks

Delta: Long

Gamma: Long

Theta: Short

Vega: Long