NEW BEARISH Plays
Virtusa Corp. - VRTU - close: 22.38 change: -0.34
Stop Loss: 22.65
Current Gain/Loss: unopened
Entry on April -- at $--.--
Listed on April 22, 2013
Time Frame: 3 to 4 weeks
Average Daily Volume = 116 thousand
New Positions: Yes, see below
Why We Like It:
VRTU is in the information technology consulting business. The stock delivered an impressive rally from $15 in December to almost hit $25 in March. Back in late March the stock was downgraded a couple of times and its upward momentum was broken. Now traders appear to be selling into strength as they lock in profits. VRTU just broke down below its simple 50-dma today and looks ready to break down below the $22.00 level soon.
More aggressive traders could launch bearish positions immediately and use a stop above the 20-dma. I am suggesting a trigger to open bearish positions at $21.80, which is just below today's low. We'll use a stop at $22.65. Our initial target is $20.10. I would keep our position size small to limit our risk.
Trigger @ 21.80 *Small Positions*
Suggested Position: short VRTU stock @ (trigger)