Buy Alert: April 15, 2015

| April 15, 2015

Buy Alert:  April 15, 2015


Trade Details

Buy Splunk (SPLK) May 15th 60 Puts for $1.65 or better (lower)



Our portfolio is heavily long-biased, so it’s time for us to take a downside position.  SPLK is one of those Internet/tech stocks which tend to sell off right away as investors become risk averse.  Whether it’s the unsustainable valuation or the sharply negative operating margin, investors jump ship in a hurry if the market gets rocky.   The stock looks due for a pullback to the 200-day moving average.

We’re going to buy May puts.  Conservative investors can take profits at $57.50.  Aggressive investors can hold down to $55.  For risk control, conservative traders should exit at $66, while more aggressive traders can hold to $70.


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Category: OTW Buy Alerts