NEW DIRECTIONAL PUT PLAYS
Allergan Inc. - AGN - close: 103.31 change: -1.43
Stop Loss: 105.30
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below
Why We Like It:
So far the month of May has been a rough one for shares of AGN. The company reported earnings on May 1st and beat estimates by one cent. Revenues were actually better than expected as well. Yet management lowered their Q2 guidance and the stock plunged on the warning. Since the report a couple of analyst firms have lowered their price targets on AGN. At the same time there have been a couple of analysts suggesting investors buy AGN on this weakness.
It looks like the sellers are winning. The oversold bounce in AGN has stalled at the $105.00 level. Shares have been stuck here for days in spite of the market's breakout to new highs and it looks like sellers are applying pressure again with today's underperformance.
I am suggesting we buy puts immediately and capture part of the next move down. There is potential support at $100.00, at the 200-dma near $97.85, and at the May 1st low of $96.77. I am suggesting we aim for $98.50.
- Suggested Positions -
buy the Jun $100 PUT (AGN1322R100) current ask $1.90
Entry on May -- at $---.--
Average Daily Volume = 2.4 million
Listed on May 08 2013