NEW BEARISH Plays
Tempur Sealy Intl. - TPX - close: 36.36 change: -1.10
Stop Loss: 38.05
Current Gain/Loss: unopened
Entry on August -- at $--.--
Listed on August 21, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.7 million
New Positions: Yes, see below
Why We Like It:
Mattress giants Tempur-Pedic and Sealy merged earlier this year. Unfortunately for the combined company they are still seeing slower sales. The latest earnings report in late July saw TPX missed both the top and bottom line estimates. If that wasn't bad enough management lowered their guidance. Now TPX has fallen to new six-month lows and is poised to breakdown below support near $36.00 and its 300-dma.
I am suggesting a trigger to open bearish positions at $35.75. If triggered our target is $31.00.
NOTE: Investors might want to limit their position size. The most recent data listed short interest at 16% of the relatively small 45.7 million share float. Meanwhile more aggressive traders may want to aim lower since the point & figure chart is forecasting at $26 target.
Trigger @ 35.75
Suggested Position: short TPX stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the 2014 Jan $30 PUT (TPX1418m30) current ask $1.70