Dear Momentum Stocks Weekly Subscriber,
I have an update on one of our current trades following a brokerage downgrade late in yesterday’s session. Shares made a fresh 52-week high on Monday and, while I totally disagree with the downgrade, I want to protect our profits.
Flextronics (FLEX, $12.65, up $0.27) common stock
Original Entry Price: $12.24 (3/2/15)
Lowered Price from Selling Options: None
Exit Target: $15.00
Return: 3%
Stop Target: $9.00, raise to $12.35 (Stop Limit)
FLEX July 13 calls (FLEX150717C00013000, $0.60, up $0.15)
Entry Price: $0.50 (3/2/2015)
Exit Target: $1.00
Return: 20%
Stop Target: $0.51 (Stop Limit)
Action: Raise the Stop Target from $9.00 to $12.35 and make it a Stop Limit on the stock position. The low on FLEX yesterday was $12.40.
Also, set a Stop Limit at $0.51 on the FLEX July 13 calls. They traded to a high of $0.61 on Monday. The low was $0.54.
Shares traded to a 52-week high of $12.74 and came within a penny of $12.75. If cleared, a run to $13-$14 could come. Support has moved up from $12.25 to $12.50.
I will ride with the July calls as along as the $0.51 Stop Limit holds, but it was a bummer to see an analyst downgrade on FLEX yesterday.
Standpoint Research downgraded shares from “Buy” to “Hold.” I will give them credit for initiating a Buy rating on the stock when shares were near $9.00 last October, but why the downgrade on momentum?
I did the extra chart work over the weekend, which showed multi-year resistance up to the mid-teens, so let’s see how it plays out. If shares pullback again, we can reassess the trades at lower levels.
All prices given in this update are current as 8:00 a.m. EST.
Every new Momentum Stocks Weekly recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.
Trade on!
Rick Rouse
Editor
Momentum Stocks Weekly