Allergan Inc. (NYSE: AGN) opened at $123.64. So far today the stock has hit a low of $123.40 and a high of $124.42. As of 12:20, AGN is trading at $124.09, up $0.45 (0.4%).After a dip that began in late 2006, this stock found support in March and rebounded nicely, climbing to a new all-time high today. Jim Cramer called the Botox maker the "single best baby boomer play there is," shaking off concern that Medicis (NYSE: MRX) will come up with a cheap alternative that will hurt the Botox biz. Cramer believes Allergan's market is strong and will keep the stock going higher. Recent technical indicators for AGN have been bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $105 range. AGN hasn't been below $105 since July and has shown support around $117 recently. This trade could be risky if one of the company's products gets in trouble with the FDA, but even if that happens, this position could be protected by the strong historical support around $106.
Brent Archer is an options analyst and writer at Investors Observer. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You When To Dump A Stock. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in AGN or MRX.
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Reader Comments (Page 1 of 1)
6-15-2007 @ 10:46PM
BOBBI said...
CRAMER, THIS TIME I HAVE TO SAY YOU ARE SOOOOOOOOOOO WRONG. RELOXIN IS SO MUCH BETTER THAN BOTOX. WHY YOU ASK? WELL SINCE I HAVE TRIED RELOXIN IT LAST ANYWHERE FROM 4-6 MONTHS BEFORE YOU NEED ANOTHER SHOT. BOTOX DOES NOT HOLD THAN LONG SO IF PRICE INTERFERS THAT MIGHT CHANGE THE USE HOWENER I DOUBT IF THE COST WILL HAVE ANY BEARING ON THE RESULTS. IT'S GREAT.