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Mastercard - MA - close: 273.98 chg: +31.48 stop: 281.01

Company Description:
As consumers and businesses continue to seek ever faster, more secure and smarter methods of payment for an increasing array of transactions, MasterCard Worldwide is at the center, providing a sophisticated set of transaction processing and consulting services that enable economic connections, fuel commercial development on a global and local scale and drive business growth for our customers. (source: company press release or website)

Why We Like It:
Mastercard (MA) reported earnings this morning that just blew the estimates away. Wall Street was looking for a profit of $2.00 a share. MA delivered $2.59. Revenues surged 29% to $1.18 billion. Fundamentally it seems that MA and V are poised for long-term growth but short-term MA looks very overbought. The rally stalled right at its weekly trendline of resistance (see chart). The fact that we're trying to call a (short-term) top on this incredibly strong stock is a very high-risk, aggressive play. We're going to give MA lots of room with a wide stop loss at $281.01. Our target is the $250.00-245.00 zone, which would come close to "filling the gap" for MA.

Suggested Options:
This is an aggressive, high-risk play. We're suggesting June out of the money puts.

BUY PUT JUN 250 MAL-RV open interest= 216 current ask $5.90
BUY PUT JUN 240 MAL-RU open interest=1269 current ask $3.70

Picked on April 29 at $273.98
Change since picked: + 0.00
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 3.1 million
 

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