NEW BEARISH Plays
KLA-Tencor - KLAC - close: 54.80 change: -1.30
Stop Loss: 56.55
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on July -- at $---.--
Listed on July 08, 2015
Time Frame: Exit PRIOR to earnings on July 30th
Average Daily Volume = 1.3 million
New Positions: Yes, see below
Semiconductor stocks have been some of the market's worst performers in the last several weeks. The SOX index broke down under key support a few days ago and underperformed the market again today (-2.6%).
While the semiconductor industry saw its stocks peak in early June, shares of KLAC peaked back in December 2014. The stock has been sinking under a bearish trend of lower highs and lower lows.
KLAC is part of the technology sector. According to the company,
"KLA-Tencor Corporation, a leading provider of process control and yield management solutions, partners with customers around the world to develop state-of-the-art inspection and metrology technologies. These technologies serve the semiconductor, LED, and other related nanoelectronics industries. With a portfolio of industry standard products and a team of world-class engineers and scientists, the company has created superior solutions for its customers for nearly 40 years. Headquartered in Milpitas, Calif., KLA-Tencor has dedicated customer operations and service centers around the world."
The company reported its Q2 2015 results on January 22nd. They beat estimates on both the top and bottom line even though revenues were down -4.1% from a year ago. Management lowered their guidance below Wall Street estimates.
KLAC announced its Q3 results on April 23rd. Earnings and revenues beat estimates again. Unfortunately their weakness in sales accelerated with revenues down -11.3%. Management followed this up with another round of weaker than expected earnings and revenue guidance. They tried to soften the blow by announcing a -10% reduction in their workforce to be completed by Q1 2016.
There have been multiple downgrades and price target reductions since their earnings report and soft guidance in April. Shares have continued to breakdown. Today saw KLAC underperform with a -2.3% decline and a new 2015 closing low.
We want to hop on board this bearish momentum. Tonight we're suggesting a trigger to launch bearish positions at $54.40.
Trigger @ $54.40
- Suggested Positions -
Short KLAC stock @ $54.40
- (or for more adventurous traders, try this option) -
Buy the AUG $52.50 PUT (KLAC150821P52.5) current ask $1.60
option price is a current quote and not a suggested entry price.
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.
Option Format: symbol-year-month-day-call-strike