NEW DIRECTIONAL CALL PLAYS
Allergan, Inc. - AGN - close 61.82 change -0.47 stop 59.38
Allergan, Inc.is a multi-specialty health care company focused on developing and commercializing pharmaceuticals, biologics and medical devices. It discovers, develops and commercializes pharmaceutical, medical device and over-the-counter products for the ophthalmic, neurological, medical aesthetics, medical dermatology, breast aesthetics, obesity intervention, urological and other specialty markets.It has two reportable segments: specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces a range of products, including ophthalmic products for chronic dry eye, glaucoma therapy, ocular inflammation,allergy and retinal diseases. The medical devices segment produces a range of medical devices, including breast implants, the Lap-Band System and the Orbera Intragastric Balloon System and facial aesthetics products.As of February 26, 2010, the Company acquired Serica Technologies, Inc.
Target(s): 63.75, 64.45, 65.25
Key Support/Resistance Areas: 65.50, 64.50, 63.80, 61.80, 59.50
Time Frame: 1 week
Why We Like It:
AGN closed above a downtrend line that began on 4/1 on Friday and has now retraced some of those gains and tested the backside of it. The stock is also above a key support level at $61.80 and all of its major SMA's, which should provide additional support if there is a pullback. I'm expecting the stock to bounce with the overall market and possibly retest its YTD highs. However, I suggest being quick to tighten stops if AGN moves higher. If AGN hits our first target we should be able to make 30% to 40% on the call position. Option activity has also been picking up mainly in the July strike prices. Our stop will be $59.38 which is below the opening gap up on Friday and all of the SMA's.
Suggested Position: Buy August $65.00 CALLS, current ask $3.10
Entry on July xx
Earnings Date 8/8/10 (unconfirmed)
Average Daily Volume: 2.58 million
Listed on 7/6/10