Filed under: Analyst upgrades and downgrades, Good news, Options, Technical Analysis, ImClone Systems (IMCL)
Imclone Systems Inc. (NASDAQ: IMCL) shares are rising today after an analyst at Citigroup upgraded the stock to “Buy” from “Hold.” Citi posted a $52 price target for IMCL and expects to hear good news at an upcoming conference. If you think that the company won’t fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on IMCL.
After hitting a one-year high of $47.94 in October, the stock hit a one-year low of $30.00 last March. IMCL opened this morning at $44.81. So far today the stock has hit a low of $43.61 and a high of $45.20. As of 11:33, IMCL is trading at $43.80, up $0.71 (1.7%). The chart for IMCL looks bullish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.
For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $35 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in just two months as long as IMCL is above $35 at May expiration. ImClone would have to fall by more than 20% before we would start to lose money.
Continue reading ImClone (IMCL) rises on upgrade
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