Spurt of activity in the long dormant off shore oil service companies….highlighted by a very large end of the day call option purchase in TransOcean (RIG): 30,000 Oct 14 calls were swept up a half hour before the close at $.14 with the stock around $12.35. Yesterday morning saw a slew of upgrades and initiations across the entire oil service space (ETF: OIH) by Morgan Stanley with RIG in particular started at over weight with a $15 PT. Not to be outdone, RBC this morning also upgraded several names with RIG getting an outperform rating and a $30 PT (not a typo) up from its earlier $15 view. Stock is now at $12.80 premarket. The off shore names (other prominent players are Diamond Offshore (DO) and Ensco (ESV) are a particularly volatile sector and has been a notorious graveyard for the past few years. It is usually the last part of the oil service sector to see any signs of recovery, and is still plagued by overcapacity and fierce price competition. It should be noted that significant open interest exists in the October puts from the $12 strike all way down the $10 strike, so some folks are clearly hedging their bets. But both MS and RBC see better days ahead.