Short Trader: Savient Bulls Take Their Medicine

The ideal setup for a short trade in Savient is to see the price close below $12 to confirm the break of support. Then the stock needs to trade back up to $12, where entry would be taken. Shares closed at $12.30 Monday.

Once the trade is entered, the stop would be placed at $13, offering $1 in risk. The first price target would be placed at $11, with a final profit target at $10.

If the price of the stock closes under $12 and then moves under $11.50 without first offering an entry, this trade setup is no longer valid. Also, if the price moves above $13 without first closing under $12, this trade setup is no longer valid.

Remember that because of the phase III trial for Puricase, there is an added degree of risk that this setup will not trigger or that a gap up against the position will occur. So you should adjust your capital risk accordingly.

Updates on Previous Picks

• Alliance Resource Partners(ARLP Quote) is still open with the entry at $35.75. The stop is at $37.75, which offers $2 in risk. The first profit target is $33.75, and the final profit target will be determined if the current support at $33.50 fails to hold as support on a closing basis. Shares closed at $36.51 Monday.
• Copa Holdings (CPA Quote) is being taken off the Watch List. Shares moved above $57.50 without first closing under $50, invalidating the setup.
• Intermec(IN Quote) also remains open, with its entry at $24.36. The first profit target of $22.25 has already been hit. Partial profits could have been taken there, and the stop should be lowered to $23. The final profit target is $19.50. Shares closed at $22.63 Monday.
• PetMed Express(PETS Quote) is still open with an entry at $12.80. The stop at $14.25 offers $1.45 in risk, and the first profit target at $11.35 satisfies the one-to-one reward/risk ratio. Partial or full profits could be taken there.

  If partial profits are booked, the stop can be lowered to $13. The final profit target would be the September lows of $9.50. Shares of PetMed closed at $12.25 Monday.

• Raven Industries(RAVN Quote) is being taken off the Watch List. Shares moved above $28.25 without first closing under $25.40, invalidating the setup.