Monthly Cash Machine Newsletter, Monday, 01/24/2005 01:03:54 PM ET
On The "Watch" List -- MERQ
HAVING TROUBLE PRINTING?
Mercury Interactive (NASDAQ:MERQ) joined the "watch" list today
after the company's stock price soared on favorable earnings news.
MERQ said fourth quarter earnings would come in well ahead of
expectations on strong sales, boosting share as high as $42.64
early in the session. Analysts reacted very positively to the
announcement, as the results were better than expected in the
historically favorable year-end period.
Our position is "bearish" with a sold call at $45, so it would seem
prudent for conservative traders to close the spread now for a
$0.50 debit with no loss in the overall position. More aggressive
traders could likely improve their results by monitoring the progress
of the issue as it nears the recent technical resistance area near
$44, and exiting the spread during any consolidation.