Option Investor
New Plays

New Option Plays

Printer friendly version
Call Options Plays
Put Options Plays
Strangle Options Plays
None SHPGY None

New Calls

None today.

New Puts

Shire Plc - SHPGY - close: 70.59 change: -0.43 stop: 73.51

Company Description:
Shire's strategic goal is to become the leading specialty biopharmaceutical company that focuses on meeting the needs of the specialist physician. Shire focuses its business on attention deficit and hyperactivity disorder (ADHD), human genetic therapies (HGT), gastrointestinal (GI) and renal diseases. (source: company press release or website)

Why We Like It:
It looks like the long-term bullish run in SHPGY has topped out. The stock has developed a bearish pattern of lower lows and lower highs. The most recent rally stalled out near $73 and its 100-dma. Now technical indicators are turning bearish. The P&F chart is bearish with a $54 target. We are suggesting a trigger to buy puts under today's low at $69.19. An alternative entry point we might consider and one readers can look for is a failed rally near $72.00 or its 100-dma (currently $73.00). Our initial target is the $65.25-65.00 range although we're considering a more aggressive target in the $62-60 region. I am willing to concede that the pattern on the weekly chart almost looks like a bull flag, which is why it is essential to play with stop losses! FYI: Any time we play a biotech or even a drug stock we're dealing with a higher-risk situation. We are at risk that some FDA decision or some clinical trial news could send the stock gapping one direction or the other.

Suggested Options:
We are suggesting the January puts. Our suggested trigger to open positions is at $69.19.

BUY PUT JAN 70.00 UGH-MN open interest=5530 current ask $2.65
BUY PUT JAN 67.50 UGH-MU open interest=1516 current ask $1.70

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/00/08 (unconfirmed)
Average Daily Volume = 956 thousand

New Strangles

None today.

New Play Archives