Seeking Alpha
  • Brian Benda
    CRM out and same reaction as NFLX on earning. Immediate pop followed by drop. Looks like about 10% decline here so far.
    11/17/11
    Reply (24)
    • rishabhsach: Should it drop more? I am actually so nervous right now! I shorted at 134.
      11/17/11
    • Brian Benda: If you shorted at 134, you are in great shape. Congrats on the trade! I bought a bunch of December 165 puts. Support 109-110, resist @ 120.
      11/17/11
    • Brian Benda: If 109-110 can break, CRM should peel off another 8-10% lower before next support level. Previous support now resistance at 120. You good.
      11/17/11
    • rishabhsach: Awesome! thank you! I should probably wait for the earnings call and see the AH right before open tomorrow. HOPE IT TANKS! :D
      11/17/11
    • Brian Benda: I would close if this thing gets back over 120, but not expecting that to happen. Otherwise, let the winner ride.
      11/17/11
    • Brian Benda: CRM volatility is very high, so it will fluctuate in a range, but trend is clearly down now. Don't be pushed out by $2-5 price variations.
      11/17/11
    • rishabhsach: Plus their GAAP EPS is negative O.o??? Why isn't it TANKING!
      11/17/11
    • Brian Benda: Heavy short interest into release. Not surprised to see a healthy bounce after initial reaction, but initial reaction is momentum direction.
      11/17/11
    • Brian Benda: Stock don't usually go straight up or down, they fluctuate. Direction is down in CRM, but expect some temp fluctuation with high volatility.
      11/17/11
    • rishabhsach: Did the same thing happened to NFLX as well? I was not following it when stuff happened to it! :D
      11/17/11
    • Brian Benda: NFLX fell more precipitously without a bounce, but that was the second time the stock fell post-release. So, slightly different scenarios.
      11/17/11
    • Brian Benda: NFLX was already broken and everyone knew it. CRM is broken, but investors have not had to face that reality until now. Some will hold hope.
      11/17/11
    • Brian Benda: Plus, I just tried to short 1,000 shares at 118.50 and the trade got rejected because my firm has none to loan.
      11/17/11
    • Brian Benda: If that is the case everywhere, then bounce is persisting a bit more than it would otherwise since there is no artificial negative pressure.
      11/17/11
    • Brian Benda: Still not worried either way. Even if you have to stop out at 120, you still bag almost 10%. Not a bad return over one trading day. :)
      11/17/11
    • rishabhsach: I see.. Thank you so much for all the info! I just have a question.. What does your inability to short shares demonstrate? i don't get it.
      11/17/11
    • Brian Benda: It says (1) large short interest already and (2) no way for me and other shorts to add to downward pressure and increase our positions.
      11/17/11
    • Brian Benda: That gives slight edge to those trying to catch a falling knife here for a few stock points in a-h session, but doesn't change momentum.
      11/17/11
    • Brian Benda: A large short position could be bad if people start to unwind their positions, and I am sure some have after capturing such a large gain.
      11/17/11
    • rishabhsach: Ohhhkk.. That explains it.. Thanks!
      11/17/11
    • Brian Benda: However, short position in this stock has been very large and vocal for a long time. So, they are looking for more than 10% drop.
      11/17/11
    • Brian Benda: So, while some will unwind for quick gain, I don't see large short interest completely unwinding anytime soon in CRM.
      11/17/11
    • rishabhsach: Ya, i'll probably just put a stop order @120 tomorrow, just in case.
      11/17/11
    • mP1: CRM dropped 10% x2 after earnings.
      11/19/11