NEW BEARISH Plays
Superior Energy Services - SPN - close: 25.78 change: -1.68
Stop Loss: 26.25
Target(s): 22.50 or 20.50
Current Gain/Loss: unopened
Time Frame: up to the Feb. 23rd earnings report
New Positions: Yes, see below
Why We Like It:
SPN sold off on big volume today. Energy stocks in general were underperformers. Yet SPN underperformed its peers with a -6.1% decline as investors worried about higher fracking costs in the U.S. This stock already has a bearish posture to it with what appears to be a triple top in the $31 area under its exponential 200-dma.
Shares of SPN are now headed for support near $25.00. I am suggesting we open small bearish positions on a breakdown with a trigger at $24.75. If triggered I'm setting an aggressive target at $20.50 but more conservative traders may want to exit near $22.50, which might be support near its October 2011 lows.
I do have to warn you that being short SPN seems pretty popular these days. The most recent data listed short interest at 33% of the 72.5 million-share float. That definitely raises the risk of a short squeeze. Readers may want to use put options to limit your risk.
FYI: The Point & Figure chart for SPN is bearish with an $18 target.
Trigger @ 24.75
Suggested Position: short SPN stock @ 24.75
- or -
buy the Feb $25 PUT (SPN1218N25)
Entry on January xx at $ xx.xx
Earnings Date 02/23/12 (confirmed)
Average Daily Volume = 2.8 million
Listed on January 26, 2011