Additional Trading Ideas:
In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these may need to see a break past key support or resistance:
NSR, BC, FDO, GMT, LOCK
NEW BEARISH Plays
Cray Inc. - CRAY - close: 27.87 change: -1.06
Stop Loss: 30.20
Target(s): to be determined
Current Gain/Loss: unopened
Entry on May -- at $--.--
Listed on May 05, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 464 thousand
New Positions: Yes, see below
Why We Like It:
CRAY is in the technology sector. The company makes supercomputers.
The stock surged back in February following a better than expected earnings report. Unfortunately the rally failed twice near $42 forming a bearish double top pattern. Since CRAY's March highs the stock has been a major underperformer with a steady trend of lower highs and lower lows.
Just a few days ago CRAY reported Q1 earnings. Wall Street was expecting a loss of 43 cents a share. CRAY missed estimates with a loss of 46 cents. Revenues fell -30% from a year ago to $51.1 million. Management then lowered their guidance for the second quarter. Management reaffirmed their full-year 2014 guidance, which was in-line with analysts' consensus estimates. Yet it looks like the market doesn't believe them as the stock continues to sink.
Technically we are seeing CRAY break down under support near $28.00 and its simple 200-dma. Tonight we're suggesting a trigger for bearish positions at $27.65. If triggered we will start with a stop loss at $30.20. I am not setting an exit target yet but the Point & Figure chart is bearish with a $19.00 target. I suspect that CRAY might find some support in the $21.50-25.00 area.
Trigger @ $27.65
Suggested Position: short CRAY stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the Jul $25 PUT (CRAY1419S25) current ask $1.50