NEW DIRECTIONAL PUT PLAYS
Illumina Inc. - ILMN - close: 79.82 change: -1.07
Stop Loss: 81.55
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below
Why We Like It:
ILMN is in the biotech industry. The company recently reported earnings on July 23rd and the news was bullish. ILMN beat the bottom line and top line estimates. Management then raised their revenue guidance. The stock reacted by gapping higher and rushing to a new all-time high near $80.
Unfortunately for the bulls there has been no follow through. Shares have been languishing sideways ever since. Now you could argue that the sideways consolidation in ILMN is due to a similar sideways churn in the market's major indices. Big picture the story seems bullish for ILMN. Yet short-term we suspect the stock could fill the gap. That means a dip toward $75.00.
We are suggesting a trigger to buy puts at $79.50. Our target is $75.25. I would keep our position size small to limit risk.
NOTE: Once ILMN fills the gap we can re-evaluate it for a potential bullish entry point.
Trigger @ 79.50 *small positions*
- Suggested Positions -
Buy the Sep $75 PUT (ILMN1321u75) current ask $2.05
Entry on July -- at $---.--
Average Daily Volume = 1.2 million
Listed on July 31, 2013