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7 Jun

LEHMQ Erupts, What’s Next?


Monday around 2:30pm EST shares of LEHMQ started to get active jumping from $.045 to $.06 for a solid 33% move and then the stock simply erupted from $.06 to it’s close of $.091.

This morning shares are setup to gap and run but before you get excited to chase, remember one thing, this is a bankrupt company and taking position comes with a high degree of risk. But before I cover LEHMQ’s recent trading action and what I see moving forward, let’s review the news that sparked this massive run.

Monday a judge ruled in favor of Lehman ordering Barclays to pay $1 billion to Lehman’s bankruptcy trustee under a decision by a federal judge in New York. Barclays has indicated they would appeal the NYS court order but traders obviously jumped all over this driving the 86% move.

So today they’ll likely be a gap and run but I don’t see LEHMQ getting past $.15. While that is a 60% move from Monday’s close, any gap will reduce that trading range which would impact the risk reward. If anything I’d say play the momentum this morning, look for a quick 10-20% but be ready for a potential pullback like we saw last week when shares ran from $.04 – $.09 before falling all the way back down.

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