Omnicom Group - OMC - close: 66.12 change: -0.57

Stop Loss: 67.55
Target(s): 60.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
OMC is in the services sector. The company provides advertising and marketing services. The market's momentum from 2013 seemed to carry over for OMC and shares hit new all-time highs in February. Unfortunately that is starting to look like the peak. OMC stock is breaking down as the company continues to struggle with its merger of equals with Publicis. OMC and Publicis, the 3rd and 2nd largest ad firms in the world, announced a merger last July. The deal has been delayed by regulatory issues. There has been a seven-month fight over who gets to become the new CFO. Meanwhile in recent months OMC and Publicis have been losing business. The number one ad firm in the world, WPP, claims to be stealing business and talent during the transition. Another industry insider said OMC and Publicis lost $1.5 billion worth of contracts in one week in April.

Technically the stock has broken down through multiple layers of support. Now shares are about to break down below $66.00. We are suggesting a trigger to buy puts at $65.75. I am suggesting an exit target at $60.50. The Point & Figure chart for OMC is bearish with a $59 target.

Trigger @ $65.75

- Suggested Positions -

Buy the Jul $65 PUT (OMC1419S65) current ask $2.45

Annotated Chart:

Weekly Chart:

Entry on May -- at $---.--
Average Daily Volume = 2.0 million
Listed on May 06, 2014