Additional Trading Ideas:
In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these may need to see a break past key support or resistance:
VNET, PBI, NOAH, BID, BBRY, FLTX, CSOD, UBNT, RSH,
NEW BEARISH Plays
Mellanox Technologies - MLNX - close: 53.49 change: -0.66
Stop Loss: 41.00
Current Gain/Loss: unopened
Entry on August -- at $--.--
Listed on August 20, 2013
Time Frame: 3 to 6 weeks
Average Daily Volume = 713 thousand
New Positions: Yes, see below
Why We Like It:
MLNX is in the semiconductor industry. They make chips for computers, storage and communication equipment.
In the company's latest earnings report MLNX beat estimates on both the top and bottom line but management lowered their guidance. Wall Street could also be worried that MLNX will face stronger competition from Intel (INTC) soon.
The stock has been consistently weak over the last five weeks. Shares are now testing support near $40.00. The intraday low today was $39.61. If the $40 level fails then the next support level could be the $35-30 zone. I would keep position small because MLNX does have above average short interest at 15% of the 37.5 million share float.
Tonight we're suggesting small bearish positions if MLNX trades at $39.50 or lower. If triggered our initial target is $35.25.
FYI: The Point & Figure chart for MLNX is bearish with a $27.00 target.
Trigger @ 39.50
Suggested Position: short MLNX stock @ (trigger)