NEW DIRECTIONAL PUT PLAYS
Acuity Brands, Inc. - AYI - close: 119.24 change: -2.57
Stop Loss: 121.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below
Why We Like It:
AYI is in the technology sector. The company makes lighting components and equipment as well as lighting systems.
The stock soared to all-time highs back in January following a better than expected earnings report on January 9th. The rally continued until AYI peaked near $145 in March. All of that earnings enthusiasm faded when they reported again in early April and missed both the top and bottom line estimates. It looks like AYI got ahead of itself and now it's retreating.
Today's display of relative weakness (-2.1%) left AYI poised to break support at the top of its January 9th gap higher. If shares move into the gap it will likely fill the gap and that means a drop toward the $110-111 area. The simple 200-dma happens to be near $111.
Today's low was $118.93. I am suggesting at trigger to buy puts at $118.75. If triggered our target is $112.00.
More aggressive traders could aim lower since the Point & Figure chart for AYI is bearish with a $98 target.
Trigger @ 118.75
- Suggested Positions -
Buy the Jun $115 PUT (AYI14R115) current ask $2.90
Entry on May -- at $---.--
Average Daily Volume = 375 thousand
Listed on May 08, 2014