$BOFI (Bofl Holding) tanked -30% today on a New York Times article that reported that one of the company's former auditors believed the high flying online bank was conducting fraudulent activity. We watched the stock bounce from the intraday low of around $100 and saw that it was consolidating in the $107 area. $BOFI was defended by an analyst and management stated that the alleged wrongdoing was completely false by stating the OCC (a regulatory body) said no action was being taken after discussing with internal auditors about the alleged wrongdoings.
After hearing about the strong defense, we decided to start initiating a position around the $107 area consolidation and hoped to see a major breakout after the defense comments had spread to the public. We slowly added on the way up (trend trading) with confidence and then took profits slowly even higher. Net profit was $6,174 on a $107.31 to $114.36 move in an hour's time.