Commodities prices have gained quite a following this year, with traders betting on increased demand due to signs that the decline in the global economy is slowing. Crude prices, in particular, have made quite a recovery in 2009, soaring from their February lows in the $42 region to their current highs near $73 per barrel. While several sectors - airlines, travel, and automakers to name a few - have suffered under the yoke of rising fuel prices, the oil service sector has experienced a renaissance of sorts. Specifically, the PHLX Oil Service Sector Index (OSX) has jumped more than 73% since mid-March, rising along support at its 10-day and 20-day moving averages.

Within the OSX, Rowan Companies (NYSE: RDC) has emerged as an outperforming equity. The firm performs contract drilling of oil and gas wells, according to Hoover's. Its fleet consists of 22 jack-up rigs and 32 land drilling rigs. The company performs contract drilling primarily in the Middle East, Texas, the Gulf of Mexico, and in the North Sea. Rowan plans to maintain its competitive edge by beefing up its current fleet of equipment. Subsidiary LeTourneau Technologies operates a mini-steel mill and manufactures heavy equipment, including front-end loaders, log stackers, and gantry cranes. LeTourneau's marine group builds offshore jack-up drilling rigs.

Technically speaking, the stock has soared more than 38% since the start of 2009. The security has staged an impressive rally from its February low of $10.28, gaining ground along the support of its 10-day and 20-day moving averages. What's more, the stock has breached long-term resistance at its 10-month trendline.

Currently, the equity is consolidating its recent gains into support near the 21-22 region. In addition to being the site of RDC's rising 20-day moving average, the area was also home to resistance in September and October 2008. This region could now provide key technical support for the shares.

Despite the security's stellar technical performance, we continue to see signs of lingering pessimism among investors. Among options players, we find that the Schaeffer's put/call open interest ratio (SOIR) for RDC stands at 0.78, which is higher than 82% of all those taken during the past year. In other words, short-term options players have been more pessimistic toward the shares just 18% of the time during the past 12 months.

Further evidence of the heavy bearish sentiment in the options pits can be seen in data from the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE). Specifically, RDC's 10-day ISE/CBOE 10-day put/call volume ratio of 1.18 reveals that puts purchased have easily outnumbered calls bought to open on these exchanges during the prior two weeks. Furthermore, this ratio ranks above 87% of all those taken in the past year, meaning that traders have rarely snatched up put options at a faster pace in the past 52 weeks.

Checking in with RDC's open interest configuration, we find that peak put open interest for the June and July series of options resides at the deep out-of-the money 15 strike, which sports more than 4,000 contracts. By comparison, peak call open interest for the June/July series totals more than 6,000 contracts at the in-the-money 17.50 strike. This preference for in-the-money calls and out-of-the-money puts indicates that options traders are not looking for RDC to rally much higher.

Outside the options pits, short sellers have also stocked up on bearish bets. Roughly 7.07 million RDC shares are sold short, representing about 6.4% of the stock's total float. That said, it would appear that some of these bears are beginning to have second thoughts, as short interest declined by 7.8% during the most recent reporting period. Should this short-covering trend continue, we could see RDC buoyed higher by the added buying pressure.

Finally, Wall Street has yet to acknowledge the stock's recent resurgence. Currently, 15 of the 17 analysts following RDC rate it a "hold" or worse, according to Zacks. Additionally, Thomson Reuters reports that the consensus 12-month price target for RDC rests at $20.81 per share - a discount to Monday's close at $21.71 per share. Any upgrades or price-target increases could result in additional upward momentum for the equity.

By Joseph Hargett Read more Stockhouse articles by Schaeffer's Research