Bad news already in the price: Buy on broker downgrade.

16 בנוב׳ 2016

Current consolidation range 54-59.
We are at the bottom of this range.
This bottom also corresponds to the long term support line, visible on weekly chart below.
Stock downgraded this morning by Credit Suisse but fails to break the support.
Believe most bad news is in the price.
Short interest on the stock is significant: 23% of float - Makes short squeeze probable on any marginally good news.
Consensus is a BUY with target price at 69.
Looking at a break above the 59 resistance.
Target 66
Stop loss 54
RR 5x

6 בדצמ׳ 2016

הערה

Every weakness towards 55 has been met with a strong rebound, such as yesterday. This validates our stop-loss at 54 and the current trading channel ($54-$59). Still awaiting a breakout to the upside on the basis of improving technical picture and a belief that “most bad news is in the price”. Short interest, as a % of float, has also been decreasing, another positive sign.

6 בדצמ׳ 2016

הערה

Day of reckoning tomorrow as the company release quarterly earnings on Dec 7 after the close, contrary to what is indicated on the graph.

6 בדצמ׳ 2016

הערה

Those who are not in this trade might want to take advantage of the volatility around earnings:

1. Dec 16 maturity --> Buy call $59 / Sell put $54 = -0.51/share (indicative) = 0.89% cost

2. Jan 20 maturity --> Buy call $59 / Sell put $54 = -0.56/share (indicative) = 0.98% cost

8 בדצמ׳ 2016

עסקה פעילה

Expected break to the upside has taken place as expected on the earnings, and under the scenario where all the bad news is in the price. The current volume after the first half hour of trading is already twice the average daily volume, pointing to significant institutional interest. Previous resistance at 66 has become support. Keep long with a stop-loss at 66. Those who put on the options strategy should exercise the calls and keep the shares.

13 בדצמ׳ 2016

עסקה סגורה: היעד הושג

- Stopping this thread/idea and starting a new one;
- Assuming a long position at 60
- Assuming all put premia cashed in
- Assuming calls exercised