On the Open I saw an analyst downgrade trade opportunity.  You could hear this on our desk:

Me: Why is this AGIO down?

Me: Anyone see anything other than the JP Morgan downgrade in $AGIO (Agios Pharmaceuticals)?

All I saw on my news wires was this:

You could hear more from me on the desk:

Me: Anything coming across Bloomberg about $AGIO?

Me: Anyone buying this $AGIO?

Me: What am I missing here in this AGIO?  It’s down 7 percent and only on a downgrade.

There was no other news that anyone on our desk saw about AGIO other than the JPM downgrade.  And it was down 7 percent.

In SMB Real-Time I chatted:

I found a good risk/reward entry right on the open down near 7% and sold into the first 4% upmove for a quick and easy chop.

Stocks up too much on upgrades are good fade candidates.  Stocks down too much on the open because of a downgrade are interesting long opportunities.

AGIO was an example of one such opportunity today.

Trade well!

Mike Bellafiore is the Co-Founder of SMB Capital and SMBU, which provides trading education in stocks, and options. Bella is the author of One Good Trade and The PlayBook.

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