Taking Profits In OpenTable (OPEN) Short

08/06/2011 Uncategorized  No comments

OpenTable

On May 4th OpenTable (OPEN) offered us a great opportunity for a classic 'short calls' Bucket 3 strategy after the stock dropped hard due to earnings.  As expected the stock never saw the pre-earnings levels again and the calls that we sold are now worth a mere 5% of where we sold them at.  So, with somewhere around 95% profits we closed the position yesterday (bought back the calls).

Technically OPEN is coming into its rising 200 day moving average (red line), which it hasn't touched since February 2010.  In a zone between $76 and $81 the stock has good support, as was further displayed yesterday with a very bullish long-legged candle right at the 200 dma.  Not to get ahead of ourselves, but should OPEN be able to stage a rally over the few days or so, we would even tag along for a try to the long side.  Stay tuned.

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