NEW DIRECTIONAL CALL PLAYS
Endo Health Solutions - ENDP - close: 66.97 change: -0.01
Stop Loss: 64.45
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below
Why We Like It:
This is a momentum play. ENDP has been a hot stock this month. On November 5th ENDP announced a very bullish earnings of $1.34 a share. That was 23 cents better than expected. Revenues also beat estimates. If that wasn't good enough management then raised their guidance. That same day ENDP announced it was buying Paladin Labs for $1.6 billion. Plus, ENDP would create a new holding company in Ireland that would reduce its tax rate. Wall Street loved the deal. Several analyst firms have since upgraded the stock.
Shares gapped higher on November 5th and have raced higher since then. Even though shares were very overbought there was almost no profit taking during a recent pullback. It was more like a pause in the rally. Now ENDP is up +50% from its pre-earnings share price and still climbing.
Today's high was $67.23. I am suggesting a trigger to buy calls at $67.35. If triggered our target is $74.00. Can the $70.00 level be overhead, round-number resistance? Yes, it could so traders may want to limit their position size.
Trigger @ 67.35
- Suggested Positions -
buy the 2014 Jan $70 call (ENDP1418a70) current ask $2.30
Entry on November -- at $---.--
Average Daily Volume = 4.6 million
Listed on November 26, 2013