IMAX Corporation - IMAX - close 19.07 change -0.20 stop 16.75

IMAX Corporation together with its wholly owned subsidiaries, is an entertainment technology company, specializing in motion picture technologies and large-format motion picture presentations. The Company is engaged in designing and manufacturing of large-format digital and film-based theater systems (IMAX theater systems) and the sale or lease of such IMAX theater systems. The Company is also engaged in the production and distribution of original large-format films, the provision of post-production services for large-format films, the conversion of two-dimensional (2D) and three-dimensional (3D) Hollywood feature films for exhibition on IMAX theater systems worldwide, the operation of four IMAX theaters and the provision of services in support of IMAX theaters and the IMAX theater network worldwide. (source: company press release or website)

Why We Like It:
IMAX bounced nicely around $18.15 today which was a prior resistance level that should now act as support. The stock also created a bottoming tail candlestick on its daily chart which may indicate that sellers of the stock are waning. Buyers have been piling into the stock in recent months and IMAX reported earnings on 4/29 that beat expectations (.53 compared to .37 estimate). The company is experiencing a surge in earnings due to the onslaught of 3-D movies on the horizon. I suggest readers take advantage of the momentum and initiate positions if IMAX pulls back to $18.50. We will place our stop at $16.75 which is just below the 50-day SMA. Our target is $20.95 which is just below the stock's 52 week highs.

Please note that I can not post a chart for this play as I am having technical difficulties with my software. Please email me with any questions. I apologize for the inconvenience.

Suggested Position: Long JUNE $20.00 CALL, current ask $1.70, estimated ask at entry $1.25

Entry on May xx at $xx.xx
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 1.9 million
Listed on May 4, 2010