NEW BEARISH Plays

Fusion-io, Inc. - FIO - close: 19.62 change: -1.20

Stop Loss: 22.05
Target(s): 17.00
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
FIO is in the data decentralization business. In spite of a bullish earnings report and raised guidance back in April the stock is selling off anyway. Just recently FIO spent a few days consolidating above round-number, psychological support at $20.00. Today's market weakness has pushed FIO below that level.

I am suggesting small bearish positions at the open tomorrow. We'll use a wide stop loss at $22.05. Our target is $17.00. This is a higher-risk, aggressive trade. We want to keep our position size small because there has been some M&A rumors with FIO as a takeover target. Traders may want to limit their risk by using put options. FYI: The Point & Figure chart for FIO is bearish with a $16.00 target.

(small positions)

Suggested Position: short FIO stock @ (the open)

- or -

buy the Jun $17.50 PUT (FIO1216R17.5) current ask $0.95

Annotated chart:

Entry on May 18 at $ xx.xx
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 4.1 million
Listed on May 17, 2011