Bear Call Spread

OSIP(OSI Pharmaceuticals, Inc)
Sell Jan 40.00 call$0.60
Buy Jan 45.00 call$0.20
Net credit $0.40

Return 8.70%

OSI Pharmaceuticals, Inc. engages in the discovery, development, and commercialization of pharmaceutical products for the treatment of oncology, ophthalmology, and diabetic diseases in the United States.

Technicals: The stock had a solid rally higher from the months of May to October which resulted in a 52-week high of $43.17. After the new high, prices slipped below the support area of the 30-dma finally finding support near the $36 mark. Prices are now coiling between overhead resistance at the down sloping trendline and support below near $36. The stock trades in the health care/biotechnology & drugs industry which looks to be bumping up against resistance and rolling over. There doesn’t appear to be much institutional interest as the stock’s fundamentals are very weak. Both the MACD’s and the Stochastics are flashing sell signals. There is a possibility of a bounce off support but there isn’t anything at this time that would cause the stock to rally through overhead resistance.