NEW BEARISH Plays
Vitamin Shoppe, Inc. - VSI - close: 46.24 change: -2.49
Stop Loss: 48.05
Current Gain/Loss: unopened
Entry on January -- at $--.--
Listed on January 23, 2014
Time Frame: 4 to 5 weeks
Average Daily Volume = 535 thousand
New Positions: Yes, see below
Why We Like It:
VSI is in the services sector. The company runs a specialty retail chain of more than 600 stores in addition to its direct marketing business.
The stock has been sinking since November last year. It looked like VSI may have found a bottom in the $46-47 zone over the last couple of weeks. The support near $46 could soon be tested. VSI underperformed the market today with a -5.1% decline thanks to an analyst downgrade this morning. The analyst is concerned that Amazon.com is a growing competitor for VSI and pressuring VSI's margins. VSI could be suffering from the same phenomenon that Best Buy (BBY) did with customers using VSI as a showroom to look at products and then go home and buy them online cheaper.
I do consider this a slightly more aggressive trade. The most recent data listed short interest at almost 15% of the 27.5 million share float. Therefore I'm suggesting small positions to limit our risk. use a trigger at $45.85 to launch bearish positions. If triggered our target is $41.00 since the $40.00 level looks like potential support.
FYI: The Point & Figure chart for VSI is bearish with a $38 target.
NOTE: Option traders may want to use the May puts to give them more time.
Trigger @ 45.85 *small positions*
Suggested Position: short VSI stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the Feb $45 PUT (VSI1422N45) current ask $1.65