Tesoro (TSO) is moving higher amid a broad rally in the energy sector. The stock is $2.18 to $28.16, as crude was able to overcome midday selling pressure and move back into positive territory. Crude was recently up 33 cents to $114.12 a barrel. In addition, TSO appears to be benefiting from takeover chatter and players in the options market are reacting. Total volume is running two times normal, with 27,000 call options and only 3,400 puts trading on the day. Directional sentiment as measured by volume is 66 percent bullish. Most of the action is in the April 30 calls, which come off the board later this week. However, some buying is also being seen in the May 30, 35, and 40 call options. On March 10, Citigroup analysts noted that TSO has removed a poison pill provision in its by-laws and firm believes the risk/reward for TSO is heavily to the upside. Earnings due out May 8.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.