Editor's Note:

Traders may want to keep an eye on shares of SODA. A breakout past resistance near $45.00 could prove to be a bullish entry point. I'd also keep an eye on shares of DVR since a breakout above resistance near $1.80 could be a new bullish entry point for a run toward its 200-dma.


Teva Pharmaceuticals - TEVA - close: 37.42 change: -0.37

Stop Loss: 38.05
Target(s): 35.10
Current Gain/Loss: unopened

Entry on December xx at $ xx.xx
Listed on December 22, 2012
Time Frame: 2 to 4 weeks
Average Daily Volume = 6.9 million
New Positions: Yes, see below

Company Description

Why We Like It:
It would appear that investors and analysts were unhappy with what they heard at TEVA's analyst day on Dec. 11th. The stock had rallied for three weeks in a row prior to the event and had broken out past resistance near $42.00 a couple of days before its "analyst day". Shares of TEVA immediately reversed following disappointing analyst comments and downgrades following the event. Since then TEVA has fallen below support near $38.00 and is now on the verge of breaking down below its 2012 lows at $37.40.

I am suggesting a trigger to open bearish positions at $37.25. This is somewhat of an aggressive trade. Short interest has probably increased over the last few days. The $35.00 level could be support as it was back in the year 2011. We will set a short-term target at $35.10 to cover. Readers will want to seriously consider using the put options to limit your risk.

Trigger @ 37.25 *Small Positions*

Suggested Position: short TEVA stock @ (trigger)

- (or for more adventurous traders, try this option) -

buy the 2013Jan $37.50 PUT (TEVA1319m37.5) current ask $0.83

Annotated chart: