New Trade HANS: I Am Washing my “HANS” of This Consumer Discretionary Name…Again
by Dan November 21, 2011 9:55 am
New Thoughts: Fundamentally I have zero edge when it comes to this company, All I know is that the price action doesn’t make sense to me and given some of the weakness of late in some other once cult stocks like GMCR, NFLX , AMZN and CRM I want get short exposure to this stock again.
Technically the stock looks vulnerable sitting right on a massive trend-line that has seen the stock rise 70% ytd and only down about 8.5% from the all time highs made earlier in the month.
TRADE: HANS $87.20 I just Bought the OCT 80/75 Put Spread for 1.00
-Bought 1 Oct 80 Put for 2.05
-Sold 1 Oct 75 Put at 1.05
Break-Even on OCT exp:
Profits btwn 79 and 75 make up to 4.00, below 75 make 4…
Losses btwn 79 and 80 lose up to 1.00, above 80 lose 1.00
TRADE RATIONALE: This trade is not high conviction as I don;t have a great handle on the fundamentals, I know it trades at a rich valuation to it’s peers….but I guess the chart and its relative performance of late is enough for me to dedicate a small amount of $ to short term trade…..I am risking what I am willing to lose….Generally I don’t want to press shorts after a sell off like we have seen in the last couple days….but if we make a new closing low in the coming week, nothing will be spared and names like this should get destroyed as evidenced by the price action of some of its peers today.