NEW BEARISH Plays
SanDisk Corp - SNDK - close 40.07 change +0.63 stop 42.20
SanDisk Corporation (SanDisk) is engaged in designing, developing and manufacturing data storage solutions in a range of form factors using the flash memory, controller and firmware technologies. The Companyâ€™s solutions include removable cards, embedded products, universal serial bus (USB) drives, digital media players, wafers and components.
Target(s): 38.15, 37.10, 35.60
Key Support/Resistance Areas: 41.00 to 40.00, 38.00, 36.00
Time Frame: 1 to 2 weeks
Why We Like It:
SNDK has rallied right into a prior support level in the $40 to $41 area which was a shelf before the stock cratered in August. This is the first time the stock has rallied back to test the prior support level and I expect it to act as resistance. Further, the stock has rallied right into a primary downtrend line which should provide additional resistance. Nimble traders may want to time a bounce of another 50 cents or so higher (near $40.65) but I'm not convinced we will get it. I suggest we open positions at current levels and target a $2 to $3 move lower, which is -5% to -7.5% lower than current levels.
Suggested Position: Short SNDK stock
Entry on October xx
Earnings: 10/21/10 (unconfirmed)
Average Daily Volume: 11 million
Listed on October 12, 2010