SSS - Follow-up on Apple (AAPL) and Alexion Pharmaceuticals (ALXN)in a strong market

Published : February 6 2013 at 11:12 ET

AAPL is making an attempt to clear the intra-day high f the gap-down day of about two weeks ago. In our view, and based on studies of prior short-sale "model stocks," AAPL is in a position to rally here within the context of the general market. Therfore we would leave the stock alone on the short side for now until and UNLESS we see the general market roll over and top. It is also possible the stock could rally into the 480-500 level, which is consistent with other leading stocks that have topped in the past.

Alexion Pharmaaceuticals (ALXN) remains within the right shoulder of a head and shoulders type of formation, but with earnings coming up one must consider the risk of remaining short anything in a strong general market. At the very least, if one is bold enough to short the stock around these levels, then a stop at the 50-day moving average should be adhered to. In our view, however, we believe investors are likely to find more "love" on the long side of the market at this time.

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