Option Investor
Play Updates

Too Low

HAVING TROUBLE PRINTING?
Printer friendly version

Play Editor's Note: The intraday lows on Friday were just a little too low for us. CI and EBAY traded one cent under our stops before racing higher.


BULLISH Play Updates

Emergent BioSolutions - EBS - close: 22.86 change: +0.94 stop: 19.45

Wow! Sometimes it seems like the market might be toying with you. We had two stocks get stopped out by a penny on Friday. EBS missed our entry point by two cents. Shares fell to $20.52 before rallying more than 10% off its intraday lows. Our suggested entry point was the $20.50-20.00 zone. We are not going to chase EBS here and will stick to our strategy for now.

If triggered we have two targets. Our first target is $22.50. Our second target is $24.50. FYI: The Point & Figure chart is bullish with a $35 target.

Annotated chart:
EBS

Picked on November xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          03/05/09 (unconfirmed)    
Average Daily Volume:       626 thousand    


Expedia Inc. - EXPE - close: 7.90 change: +0.47 stop: 6.95

EXPE fell to $7.15 intraday and then rallied more than 10% off its lows as the market headed higher into the weekend. This looks like another bullish entry point to buy EXPE although if you're initiating positions here you may want to use a tighter stop loss.

We have two targets. Our first target is $8.45. Our second target is $9.75. More aggressive traders may want to aim higher.

Annotated chart:
EXPE

Picked on December 02 at $ 7.50 *triggered       
Change since picked:     + 0.47   			
Earnings Date          02/05/09 (unconfirmed)    
Average Daily Volume:       4.7 million     


BEARISH Play Updates

*We currently do not have any bearish play updates*


CLOSED BULLISH PLAYS

Allegheny Energy - AYE - close: 32.71 change: +0.84 stop: 30.85

The volatility on Friday was too much for our AYE play. We knew we were at risk of getting stopped out on an intraday move but we didn't want to risk an intraday drop turning into the start of another leg lower. Shares of AYE gapped open lower at $30.95 on Friday. AYE quickly hit our stop loss at $30.85 and then plunged to $29.78 before bouncing back into the green. It was a 9.8% rebound off its intraday lows. Our play on AYE is closed but we would watch it for a new rise over $33.50, which would look like another bullish entry point.

chart:
AYE

Picked on December 01 at $32.00 *triggered       
Change since picked:     + 0.71   			
Earnings Date          02/05/09 (unconfirmed)    
Average Daily Volume:       2.8 million     


CIGNA - CI - close: 14.14 change: +1.83 stop: 11.49

What happened to CI on Friday is enough to make you want to curse at your computer screen! Thursday night we raised our stop loss to $11.49 over concerns that the jobs report might be worse than expected and that the market might crash because of it. Sure enough the jobs data was a lot worse and stocks did turn lower but the market found strength intraday.

Shares of CI slipped toward the $11.50 level. Hovered there for a few minutes, then dipped to $11.48, hitting our stop loss, right before exploding higher. The rally off CI's intraday low on Friday was more than 22%.

At this point we would keep CI on your watch list and consider buying a dip in the $13.00-12.50 zone.

chart:
CI

Picked on December 02 at $11.73 /gap down entry
Change since picked:     + 2.41 /originally listed at $11.99
Earnings Date          02/05/09 (unconfirmed)    
Average Daily Volume:       8.1 million     


EBAY Inc. - EBAY - close: 13.96 change: +0.56 stop: 12.79

We have a very similar story with EBAY. The market's weakness on Friday pulled EBAY down to the $12.80 level. The stock saw a brief tick under $12.80 down to $12.78, which was enough to hit our stop loss at $12.79 and close the play. EBAY proceeded to rally to four-week highs near $14.00. Readers may want to keep EBAY on their watch list and consider new bullish positions on a dip near $13.50 or a breakout over $14.00.

Annotated chart:
EBAY

Picked on December 02 at $12.95 /gap down entry
Change since picked:     + 1.01 /originally listed at $13.26
Earnings Date          01/22/09 (unconfirmed)    
Average Daily Volume:        21 million     


Premier Investor Play Update Archives