Bear Call Spread-March 07

CEPH
$67.25Bear Call
Sell Apr 75.00 call $0.80
Buy Apr 80.00 call$0.30
return $0.50
11.11%


Technicals: The stock peaked in March of last year at a 52-week high of $82.92 and then promptly turned around falling to a 52-week low of $51.58 just a few months later. More recently, prices have been channeling sideways between overhead resistance, now near $75, and support below around the $70 mark. Last week, prices slipped below support for the first time in months giving us a breakout to the downside. The stock may return to test old support as new resistance, but for now things are looking weak. The stock trades in the health care/biotechnology & drugs industry which continues to pull back over the last two weeks and the stock’s fundamentals are very weak. Currently, both the MACD’s and the Stochastics are revealing sell signals.