Wednesday, June 4, 2014

New Positions: RBCN, NQ

I added two new positions today. First RBCN at 7.52:


RBCN makes sapphire glass for semiconductors and potentially for face plates cell phones.  A competitor GTAT has a long term deal with apple, which has essentially taken all the supply.  Should the industry grow, new players would likely go to RBCN as a supplier.   It missed earnings which caused the dip.   I  like the risk to reward here has 7.50  could provide support a break of 7 and I'm out.   1R risk on the trade.

Dynamic chart:




NQ:  This one is interesting. For months NQ has been dogged by reports by Muddy Waters that the company was engaging in fraud. Today, the company issued a press release advising that the independent auditor found no evidence that the company was engaging in fraud and substantiated revenue growth.  The stock exploded upwards:


I believe that this is a type of episodic pivot event discussed by Stockbee. The volume was huge and the news could be a game changer leading to a multi-week change.  Still it is Chinese  and where there is smoke there is often fire. To that end, I felt the best way to play and manage risk was to buy the calls.  I bought August 12's for 1.85.  For options, I assume that my position will go to 0.00 and take the position size accordingly.



No comments:

Post a Comment