Closed out PX today at 120.00 from entry in November 2016 and, considering this a mismanaged trade, I am very happy to make it out with a profit. Bought back in November with an average price of 116.35 and had several opportunities to close it out as it approached 125, but seemed to get caught up in the news that the Linde merger was going to drive this to the moon. Sure enough, when the merger was announced on 12/20/16 the stock tanked. Failed to stick to my original plan and definitely should have taken at least partial profits above 124.
Stock has shown some strength in the past couple weeks and I’m happy to exit for a profit as well as capturing the .75 dividend in December. Looking to put these funds to better use by sticking to the game plan on the next trade.
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.
Update on PX. Still holding from 11/8/16. Feel like I missed some good opportunities to sell above 124 in mid December. Chalk it up as a lesson learned to not get caught up in the fundamental hype of the stock- ie Praxair/Linde merger chatter. Once the merger was announced on 12/20/16 the stock PX was hit pretty hard. Fortunately has held above November lows which I am using as my stop. Stock is currently oversold and perhaps Friday’s trading session is the beginning of the bulls stepping back in.
PX added to watch on 11/7. Bought PX on 11/8 at 117.65. Bought more PX on 11/14 at 115.66. Avg price is 116.35. PX went ex-div on 12/5. Received .75 dividend on 12/15.