On CNBC’s “Options Action,” Carter Worth shared with the viewers a bearish technical analysis for MarketAxess Holdings Inc. (NASDAQ: MKTX). He said the stock is the single best performing financial stock in the S&P 500 over the last 15 years, but it is also in trouble.
Worth noticed bearish patterns on MarketAxess’ chart, a descending wedge pattern and a head-and-shoulders pattern. The stock has also broken below a well-defined trend line and Worth sees more downside ahead.
Mike Khouw sees fundamentals problems for the stock. It trades at 61 times earnings and that would be fine if it had massive growth, he said. Recently MarketAxess’ growth has slowed year-over-year to 7% and it could also record a decline for the full year 2021.
To make a bearish bet, Khouw wants to buy the November $400/$370 put spread for a total cost of $6.60. The trade breaks even at $393.40 or 7.22% below the closing price on Friday. It can make a maximal profit of $23.40 if the stock drops to $370 or lower.
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