NEW BEARISH Plays

SolarWinds, Inc. - SWI - close: 44.64 change: -1.00

Stop Loss: 46.15
Target(s): 40.25
Current Gain/Loss: + 0.0%

Entry on May 10 at $--.--
Listed on May 09, 2013
Time Frame: 3 to 6 weeks
Average Daily Volume = 1.3 million
New Positions: Yes, see below

Company Description

Why We Like It:
Don't confuse SWI for a solar-energy company. They are in the application software industry. The last several weeks have been rough for SWI's stock. Shares peaked back in March. The correction began in April with a breakdown below its trend of higher lows and a break below its rising 200-dma. SWI was starting to rebound when the company reported earnings on April 30th, after the closing bell. The company beat estimates by four cents yet missed the revenue estimate by a wide margin. Making matters worse was management lowering their revenue guidance. The stock plunged on May 1st. Now it looks like the oversold bounce from May 1st is failing at the $46.00 level.

I am suggesting new bearish positions now at the open tomorrow. We will start with a stop loss at $46.15. Our target is $40.25.

suggested Position: short SWI stock @ (the open)

- (or for more adventurous traders, try this option) -

buy the Jun $42.50 PUT (SWI1322R42.5) current ask $1.20

Annotated chart: