Rebounded off a double-bottom on the in good , but not as much as the rest of the financials.
Similar story to another, smaller asset manager highlighted recently (please check LM idea).
1. Buy here with target 28.50 and stop 23.50 for a RR of 1.83x
2. Buy here with target 32.00 and stop 22.30 for a RR of 2.28x
3. Buy Jan 16'17 28.00 call at 0.32 and sell same maturity 23.00 put at 0.45
A catch up was bound to happen for this sub-sectors of the financials complex.
The expected break to the upside took place yesterday on heavy volume.
Expect the fundamentals for asset managers to improve, in the context of this market rally, which should fuel better earnings.
In this context, here is a recap of the 3 strategies above:
1. Stay long, move the stop loss to $27/share;
2. Stay long, move the stop loss to $27/share;
3. Do nothing for now.
- Very congested $26-27 area has now been breached;
- Stock catching up with the rally in the financials, as expected;
- Currently looking overbought but the breakout looks healthy;
- New support levels $25.25 and $26.60;
- KEEP HOLDING, maintain stop-loss at $27 - The position is in the money, let it run its course;
- Options position should be closed (profit = $2.23/share or 8.92%);
- Alternatively exercise your call and pocket the premium put ($1.97/share).