Wednesday, December 5, 2012

PAYoff time?

Verifone (PAY) is a big player in Electronic Payment Systems. Its has been growing sales and earnings at a rapid clip, however has been hurt lately because of increasing fears of competition from likes of Square and PayPal. I think the market is big enough and yet nascent for multiple players to co-exist and grow at a decent rate.

PAY chart looks very nice. This is the 4th attempt to push through highs 32.75 level. It broke through that level today on a very decent volume but finished lower on market weakness. Clean break of 32.75 should easily take it to 33.75 to 34 range for first gap-fill. Please note it has earnings on Dec 13th. I think this may run nicely till then.  We may see 38 level soon.

I may actually play this one into earnings using Option call spreads. If anyone has thoughts on what spreads to use, please let me know.

No comments:

Post a Comment