Align Technology - ALGN - close: 67.08 change: -0.09

Stop Loss: 64.45
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 496 thousand
Entry on November -- at $---.--
Listed on November 09, 2015
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Trade Description:
A better than expected Q3 earnings report launched ALGN to new highs. Shares have managed to hold on to most of its gains.

ALGN is in the healthcare sector. According to the company, "Align Technology is the leader in modern clear aligner orthodontics that designs, manufactures and markets the Invisalign® system, which provides dental professionals with a range of treatment options for adults and teenagers. The Company also offers the iTero 3D digital scanning system and services for orthodontic and restorative dentistry. Align Technology was founded in March 1997 and received FDA clearance to market the Invisalign system in 1998. Visit for more information."

ALGN's guidance has been disappointing all year long. Prior to the company's Q3 earnings report on October 22nd, ALGN has lowered guidance three quarters in a row. That changed with their last report.

Wall Street was expecting ALGN to deliver earnings of $0.30 a share on revenues of $205 million. ALGN beat estimates with earnings of $0.34 a share. Revenues were up +9.4% to $$ 207.6 million. Their clear aligner shipments were up +23.3% worldwide. Their teenage clear aligner shipments rose +22.3%.

Joe Hogan, Align Technology President and CEO, commented on his company's quarterly results, "Q3 was another good quarter, with revenues and EPS above the high-end of our guidance. Our results were driven by strong Invisalign case volume, with growth across all customer channels and geographies, reflecting our highest year-over-year growth in North America in three years with continued strength coming from EMEA and APAC, expansion in low-stage product segment and seasonally strong uptake by teenage patients, which account for 75% of the Orthodontic market."

ALGN management then raised their guidance for Q4. They see earnings in the $0.50-0.53 range compared to analysts' estimates at $0.49. The company also raised their Q4 revenue forecast to $223-227.9 million.

The stock soared on this news from about $61 to nearly $68. Shares have spent the last couple of weeks digesting these gains. Now ALGN looks poised to breakout to new highs. The $65.00 level was major resistance and the breakout should signal a new leg higher. Tonight we are suggesting a trigger to buy calls at $68.55.

Trigger @ $68.55

- Suggested Positions -

Buy the JAN $70 CALL (ALGN160115C70) current ask $2.15
option price is a current quote and not a suggested entry price.

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike

Daily Chart:

Weekly Chart: