Back in early January, Allscripts (MDRX) looked like it was ready to break out. I had it near the top of my watch list and then -- nothing. The stock stalled and retraced the entire December move higher. Now MDRX is at it again with a somewhat similar look. This time I am jumping in on the action. The first push toward a breakout was met with the resistance of a gap fill. The second push should find a little less resistance. There's a clear double bottom at $11.50 on a closing basis, so that is my risk. On a close below $11.50, I will stop out of this long, although some may choose to use that $11 mark from early November. A push above the $12.75 to $12.90 area should get a quick pop to $13.20, although I'm still looking for the $13.50 to $14 area. An alternative approach would be to look to sell the March $12.50 puts at $0.40 if you can get a fill. If the stock moves higher to the $13.20 area, it will give you a similar dollar return and the break-even if down at $12.10, so there's a 4.3% cushion from this level.
Rumors of a possible EOG Resources (EOG) purchase by Statoil (STO) have the energy sector jumping. My favorite in the group is Cabot Oil & Gas (COG). I've been looking for a decent energy name to add and I think COG is it. Despite recent woes in the sector, this chart has a nice rising W formation and is breaking out of a trading channel today. Any move below $27 would classify this channel as a bearish flag, so I will have to stop if we see that break. I don't expect a major move up, but this could easily move another dollar or two in the short-term with little resistance. Like MDRX, another approach would be to sell the March or April $30 puts, although the spreads are a bit wide. I prefer to simply buy the stock and use a $27.50 put as a hedge if I'm uncomfortable with overnight gap risk.
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