Normally, I tend to avoid listing new plays the night before a jobs report. The market reaction to the jobs data can be so volatile. Yet lately it seems that even a bad jobs report can't stop this bull market. Currently expectations have been growing for a strong number tomorrow. Hopefully that doesn't set us up for a disappointment and an overreaction lower.
NEW DIRECTIONAL CALL PLAYS
Quality Systems Inc. - QSII - close: 81.77 change: +1.05
Stop Loss: 77.90
Target(s): 87.25, 94.50
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 8 weeks
New Positions: Yes, see below
Why We Like It:
QSII is another healthcare information technology company. The stock's late February breakdown proved to be a bear trap and now shares are breaking out past resistance near $81.00. The stock can be somewhat volatile so I consider this a slightly aggressive trade. I am suggesting new positions now but you could cross your fingers and hope for a dip near $80.00 instead and buy calls there. I'm giving QSII room to move with a stop loss at $77.90. Our upside targets are $87.25 and $94.50. Odds are good QSII could see another more short covering.
FYI: Readers will be interested to note that the most recent data listed short interest in QSII at almost 28% of the very small 17.5 million-share float. That's definitely a recipe for a short squeeze. Plus, the Point & Figure chart for QSII is bullish with a $119 target.
- Suggested Positions -
Buy the April $85 calls (QSII1116D85) current ask $1.40
- or -
Buy the June $85 calls (QSII1118F85) current ask $3.50
Entry on March 4th at $ xx.xx
Earnings Date 05/31/11 (unconfirmed)
Average Daily Volume = 154 thousand
Listed on March 3rd, 2010