MomentumOptionsTrading.com Weekly Wrap Profit Alert (NPSP) for 10/9/2013
12:05pm (EST)
Shares of NPS Pharmaceuticals (NPSP, $29.17, down $2.04) had been on an incredible run from late August up until this week as they surged from $25 to $35 in a month. We have been following the company for a few years now and we said at $25 shares were setting up to make a run at $30 as we saw momentum building.
We then raised our Price Target to $35 after this level triggered and last week shares reached $35.72 by Wednesday before closing at $34.70.
The stock traded above $35 every session since but failed to close above this level leading us to believe a top was in. We set Stop Limits for both our Daily and Weekly Wrap near-term and long-term options and we closed both positions for solid triple-digit profits after they triggered.
The Daily call option trade made 103% in 2 weeks while the Weekly Wrap LEAP option trade made 182% in a little over a month. We have done some quick chart work to see where resistance could set in but we will be playing the upside again on this stock somewhere down the road.
Subscribers, check the Weekly Wrap Premium section for the update. We could also have an additional Profit Alert or 2 for the Weekly Wrap so stay close to your email inbox.
Weekly Wrap Premium Section
12:05pm (EST)
Profit Alerts!
NPS Pharmaceuticals (NPSP, $29.17, down $2.04) LEAP Option
January 31 calls (NPSP140118C00031000, $3.50, down $2.00)
Original Entry Price: $1.40 (8/29/13)
Exit Target: $2.80 (closed half at $2.90 on 9/10/13, closed half at $5 on 10/9/13)
Return: 182%
Stop Target: $5
Action: We had a feeling shares would test $30 following yesterday’s drop below $32 but the selling pressure has pushed shares to a low of $27.77 today. Our $5 limit stop has been triggered and while we are disappointed to be out of the trade, it was a fun ride. We will be trading this name again. We had great success with NPS for our Daily as well after closing a near-term trade for 103%.
Going forward, resistance at $30 will likely hold today and down the road, we can wait for a pop past $30 or $32 to get back in.
Rick Rouse
Chief Options Strategist
Rick@MomentumOptionsTrading.com
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