BMRN (long)
Ascending Triangle
Entry: Waiting for pullback, buy above the high of the low day
Stop: Place stop under the pullbacks low
Target: $23
Option Play: FEB 20 calls
Comments: BMRN recently broke out of resistance on pretty good volume, if we see a pullback in this stock we will likely enter. It has shown relative strength to the market over the past few days along with increasing volume.
Gild (long)
Ascending Triangle
Entry: $48.75
Stop: 46.70
Target: $52
Option Play: FEB 47.5 or 50 calls
Comments: GILD is resting on its main moving averages (10, 20, 50 and 200-Day). If we see prices begin to move higher, this should be a very easy to manage trade. Keep in mind the $50 psychological resistance level and watch for hesitation by bulls or bears to step in at that point.
SINA (short)
Bounce off Resistance
Entry: $21.14, a move below Friday’s low
Stop: $22.59
Target: $19, watch to see if we get a bounce or breakdown at the $20 level
Option Play: FEB 22.5 puts, this stocks option volume and open interest are quite low.
AXP (short)
Descending Triangle
Entry: $17.50 area Stop: $20-21, or previous high
Target: $15, $10, this is a very wide triangle over a two month period so we may see a break lower, then a small rally before the final target is reached.
Option Play: FEB 17.50 puts, tight spread and high open interest.
Comments: We have been watching AXP for the last few trading sessions and it has performed very poorly on higher volume, if we see a small rally back to the down trendline one last time, the bears should step in and the stock should break lower making for a great entry point!
RL (short)
Bounce off Resistance
Entry: $41-$42 area Stop: Last swing high before moving lower
Target: $38.50
Option Play: FEB 45 or 40 puts, the 45’s will have more intrinsic value, but look to the volume and spreads upon entry.
Comments: RL finally broke down below its $42 support level last week which will now act as new resistance allowing for an easily managed trade.
