NEW BEARISH Plays
Theravance Inc. - THRX - close: 33.09 change: -0.86
Stop Loss: 34.75
Target(s): to be determined
Current Gain/Loss: unopened
Entry on March -- at $--.--
Listed on March 17, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 761 thousand
New Positions: Yes, see below
Why We Like It:
THRX is in the healthcare sector. They are a biotech company focused on small molecule medicines.
The stock saw big gains in April and May last year. Since then THRX has been dead money with shares churning sideways. Recent action has produced a breakdown from its trading range and a breakdown below key support.
Today's low was $32.91. I am suggesting a trigger to open small bearish positions at $32.85. I am not setting a target yet but more conservative traders might want to exit near $30.00, which could be round-number support.
I want to remind investors that biotechs can be volatile stocks to trade. You may want to consider buying the put options as a way to limit your risk. THRX does have above average short interest. The most recent data listed short interest at 25% of the 58 million share float. That does raise the risk of a short squeeze.
It's also worth noting that THRX just announced plans to split their company into two listed companies some time in the second quarter of this year.
FYI: The Point & Figure chart for THRX is bearish with a $25.00 target.
Trigger @ 32.85
Suggested Position: short THRX stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the Apr $30 PUT (THRX1419P30) current ask $0.90