Holding PX since 11/8/16, and looking to hold through earnings this week which are expected to be announced before the market opens on Thursday, 1/26/17. Interesting to note some unusual option activity last week on PX, the apparent call buying of the April 125 calls on 1/19/17 and February 120 calls on 1/20/17. This could be seen as bullish speculation as the stock would have to rally approximately 3.4% and 7.7%, respectively, for each of those option trades to be profitable from its current level of 117.39. Interesting timing for the option trades as the stock has recently been beaten down on the news of the Linde/Praxair merger which was announced on 12/20/16. Prior to that, PX had been trading in the range of 122-124 for several days in mid December. Also worth noting that the option trades were placed the week prior to earnings, which is likely to be a catalyst.
From a technical standpoint, PX has looked pretty poor since the merger news and drop on 12/20/16 but has continued to show support around 115. I am interested in holding PX as long as it remains above November lows, specifically the low of 114.43 on 11/4/16. One could make a possible bullish case for a reversal in PX in January as the stock has found support at 115 on three occasions, two of which formed bullish candlestick reversal signals- a bullish harami on 1/6/17 and a bullish engulfing on 1/11/17. Who knows how it will unfold this week and what earnings will bring. Time will tell.
- 3/1/17 Update – Closed out PX today at 120.00 for 3.8% overall