Fuel System Services Moves Higher Despite Recent Downgrades

Shares of Fuel System Services Inc. (NASDAQ: FSYS) are moving higher today by 3.71% to $29.38 and are making a run at the 50-day and 200-day moving averages from the downside. While a bullish signal has not been triggered yet, the chart appears to be gaining momentum after basing around the $26 level.

Volatility in Fuel System Services Inc. is showing some odd signs as well. The implied is trading at a discount to the historical (67% versus 93%) and ut-month options are trading at even larger discounts. I think the alternative energy and fuel company could start to move rather soon.

I would be buying the July $29 straddle for $5.40 and look to scalp premium and volatility in the name rises to match historical.

Fuel System Services Inc. was recently downgraded by both Canaccord and Thomas Weisel.