NEW BEARISH Plays
BroadSoft, Inc. - BSFT - close: 24.84 change: -0.16
Stop Loss: 25.25
Current Gain/Loss: unopened
Entry on April -- at $--.--
Listed on April 09, 2013
Time Frame: exit PRIOR to earnings in early May
Average Daily Volume = 854 thousand
New Positions: Yes, see below
Why We Like It:
BSFT is a software company. The stock peaked back in early February and then was hammered lower in late February when the company issued an earnings warning. Since then the oversold bounce has produced a bearish reversal at resistance. Now BSFT is threatening to breakdown below support near $25.00.
Actually if you study an intraday chart you can see that traders have been buying the dips in the $24.60-24.80 area. I am suggesting a trigger to launch small bearish positions at $24.50. If triggered our target is $20.75. The 2013 low was $20.45.
Please note that we do want to limit our position size to reduce our risk. The most recent data listed short interest at 21% of the small 27.6 million-share float. Thus if BSFT were to suddenly turn higher it could spark a short squeeze. Furthermore there has been some speculation that BSFT is a takeover target. You may want to consider buying a put option instead of shorting the stock as a way to limit your risk.
Trigger @ 24.50 *Small Positions*
Suggested Position: short BSFT stock @ (trigger)
- (or for more adventurous traders, try this option) -
buy the May $25 put (BSFT1318Q25) current ask $2.45