BULLISH Play Updates
IMAX Corporation - IMAX - close 17.36 change -1.54 stop 16.75
Our IMAX play could be in serious trouble. Traders bought the dip Tuesday, Wednesday and Thursday but they sold the stock hard on Friday. IMAX gave up more than 8% and closed under the $18.00 level. The selling paused near the 50-dma around $17.00. This action is definitely bearish with volume way above average at nearly 3.5 million shares. I couldn't find any news to account for this relative weakness. If stocks fail to rebound on Monday odds are good we'll get stopped out soon. I'd wait for a bounce back above the $18.00 level before considering new bullish positions. Our target is $20.95 which is just below the stock's 52 week highs.
Current Position: Long IMAX stock at $18.50.
Suggested Position: Buy JUNE $20.00 CALL
Entry on May 5 at $18.50
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 1.9 million
Listed on May 4, 2010
BEARISH Play Updates
Moody's Corp. - MCO - close 23.36 change -0.18 stop 28.10 *new*
The trend in MCO is down but we didn't want to chase it. The plan has been to open bearish positions on a bounce at $25.25. That may be wishful thinking - the idea that MCO will bounce. The company just announced in their 10-Q filing that the SEC has delivered a Wells Notice to MCO back in March. SEC claims that MCO's 2007 application to stay a nationally recognized rating agency was "misleading" (source: Reuters). MCO disclosed that the SEC was considering a cease-and-desist action against the company's credit rating business. I did not see any post-market action on this news but it was released late Friday. Shares might gap down on Monday. We'll have to wait and see but news of this SEC action definitely puts pressure on the stock price.
If we are triggered at $25.25 our first target is $23.25 and our second, more aggressive target is $21.85. Our time frame is two to three weeks. Please note that I'm adjusting the stop loss to $28.10, just above the 50-dma.
Suggested Position: Short MCO at $25.25
Suggested Position: Buy JUNE $25.00 PUT (MCO1019R25)
Entry on May xx at $xx.xx
Earnings Date Over two months
Average Daily Volume: 3.5 million
Listed on April 26, 2010
Sina Corporation - SINA - close 32.74 change -0.26 stop 38.80
The trend in SINA is down even before the market started to correct. The stock's pattern of lower highs finally pushed shares down through support near $35.00 and SINA hit our first target at $33.25 on Thursday. Now broken support near $35.00 should act as new overhead resistance. More conservative traders may want to consider lowering their stops toward $36.50 or the $35 area. Keep in mind that SINA is short-term oversold and will see a bounce eventually. Our second and final target is $30.50.
Our time frame is several weeks.
Current Position: Short SINA stock at $34.95
Suggested Position: JUNE $35.00 PUT
Entry on May 4th at $34.95
Earnings Date June 9, 2010 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on May 1, 2010