NEW BEARISH Plays
Financial Engines, Inc. - FNGN - close: 39.12 change: -1.60
Stop Loss: 42.25
Target(s): to be determined
Current Gain/Loss: unopened
Entry on May -- at $--.--
Listed on May 13, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 567 thousand
New Positions: Yes, see below
Why We Like It:
FNGN is part of the financial sector. The company provides management services and advice on retirement plans.
Last year's momentum in FNGN has reversed and the stock is accelerating lower and with good reason.
FNGN's gap down on February 21st was a reaction to its earnings report where the company missed both top and bottom line estimates and then guided lower. It just happened again a few days ago. FNGN reported earnings on May 6th and missed Wall Street's top and bottom line estimates and then guided lower.
The path of least resistance is down and investors are likely to be selling the rallies. I would be tempted to short FNGN now but we are actually suggesting a trigger to open bearish positions at $38.75. We're not setting an exit target just yet but I suspect the $30 level could be possible support.
FYI: The most recent data listed short interest at about 13% of the 50.4 million share float.
FNGN does have options. You may want to consider buying put options instead of shorting the stock. However, the option spreads appear too wide to trade. I am not suggesting put options.
Trigger @ $38.75
Suggested Position: short FNGN stock @ $38.75