Shares of Giant Interactive (NYSE: GA) are trading higher on the session by 5.37%, trading at $4.12. The stock has ticked higher all session and now has its eyes set on fresh daily highs.

Giant Interactive has been meandering higher for the past six weeks following a sharp decline in mid-September and subsequent bottom around the $3.00 mark. With share regaining the 20-day moving average (which has smoothed dramatically), GA now has a chance to push higher and test the $4.24 resistance level.

A successful break and hold of the $4.24 level gives Giant Interactive the green light to test the 50-day moving average and, perhaps, gap fill. Note that GA has only 1.89% short interest, which means that the potential for short covering is small; a rally will rely solely on longs.

Potential longs should look at in-the-money calls, such as the Dec2011 $2.50 strike, as a lower cost alternative to purchasing long stock.

Giant Interactive Group Inc. is an online game developer and operator in China. The company focuses on massively multiplayer online games that are played through networked game servers, in which a number of players are able to simultaneously connect and interact.

Source:benzinga