NEW DIRECTIONAL CALL PLAYS
Shire Plc - SHPG - close: 100.35 change: +0.80
Stop Loss: 99.75
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to earnings on Feb. 14th
New Positions: Yes, see below
Why We Like It:
Shire is an Ireland-based biopharmaceutical company. You could argue the stock might be overbought here given its very impressive rally from the November 2012 lows. Yet the stock has been consolidating sideways the last several days and looks poised to breakout higher again. Bigger picture (see the weekly chart below) it looks like SHPG has created a bullish "W" bottom pattern.
This is a short-term trade. We do not want to hold positions over the Feb. 14th earnings report. For that reason I am listing the February calls, which expire after the 15th. Otherwise I would probably choose the March calls (and aim higher).
Looking at Februarys I would play either the Feb. $100s or the Feb $105s. The spread is wider on the $105s but your capital outlay is less.
I am suggesting a trigger to open bullish positions at $101.15. If triggered our target is $104.90.
FYI: The Point & Figure chart for SHPG is bullish with a long-term $137 target.
Trigger @ 101.15
- Suggested Positions -
buy the Feb $105 call (SHPG1316b105) current ask $0.90
Entry on January -- at $---.--
Average Daily Volume = 323 thousand
Listed on January 29, 2012