After announcing earnings last night, as well as the departure of their current CEO/President, the stock is getting punished today…currently down about 14% on the day. The stock rose almost 400% from the beginning of 2010 to just last week and sports a current P/E of 155.
As such the stock certainly was and still remains a high-flyer, and maybe one that is about to lose this title or at the very least undergo some serious consolidation.
There should be pretty good support at $83 on the chart, just so I've said it.
What we are doing however is our classic bucket 3 trade where we sell far out of the money options to suck in the still fairly high option premium and take advantage of a currently broken chart, meaning that new highs are not necessarily around the corner.