ShareCrazy.com

The Bet:

We recommend opening a buy bet in June Shire (Expiry June 18th) at £15 a penny when the quote is standing at 985p - 993p.The target is 1,100p initially, and the stop loss at 939p for a risk of £810 at our suggested wager.

The Fundamental View:

The fundamentals here are quite simple. Shire is a FTSE 100 drugs company, but not big enough in terms of critical mass to be one of the big world players yet. Recent evidence points to 600 contracts of the June 880p puts traded at 30p, and 600 of the June 1000p calls traded at 78p in the options market.

But the big news is that Pfizer is rumoured to be interested in bidding for Shire, and we are going with this as the reason to open a June buy bet in Shire Pharma. What is probably of most interest to Pfizer if a deal goes ahead is the protected ADHD franchise and Human Genetics Therapies division that Shire has.

The Technical View:

Today the shares are back in business on the long side on the back of Pfizer bid speculation and a spike higher off the floor of a late January ascending price channel at 940p. Above this on an end of day close and the target is the area between the black January resistance line at 1,070p and the main 2007 resistance line at 1,100p

The stop loss is at 939p just below the near term support line of 940p.

Conclusion:

Open a buy bet in June Shire in the wake of Pfizer bid speculation.

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