Monthly Cash Machine Newsletter, Wednesday, 04/20/2005 02:39:36 PM ET
Trade Alert - PIXR
HAVING TROUBLE PRINTING?
Another Giant Falls!
One of our bullish positions; Pixar (NASDAQ:PIXR), finally succumbed to the broad selling pressure in equities today. The issue has moved below $45.75 on an intraday basis, which is our (split-adjusted) loss-limit point in the issue, thus traders should consider an early exit in the position.
Since the original play involved 5 contracts, the transaction to close the spread requires the purchase of:
(10) MAY-45.00 Puts PQJ-QI
and the sale of:
(10) MAY-42.50 Puts PQJ-QV
The current net-debit to close the spread is approximately $0.70-$0.75, however the exit trade might be improved through the use of individual orders.
Although we had hoped PIXR would be able to successfully oppose the bearish onslaught, a similar fate has recently befallen positions in Black & Decker (NYSE:BDK) and Sealed Air (NYSE:SEE), so the only remaining bullish spreads in the MCM Portfolio are Mentor (NYSE:MNT) and Genentech (NYSE:DNA). Considering today's activity, it seems prudent to keep a close watch on these issues as we try to find some new candidates to offset the recent losses.