Move on FDX
Bounce Off the 50-Day MA
PLAY: Buy the FDX February 85 Calls (FDX BQ) at or under $2.55, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $3.30.
Dear Bottarelli Research Member,
In past trades, we’ve all witnessed just how quickly shares of Green Mountain Coffee Roasters (GMCR – NASDAQ) can move higher. As you know, we’re positioned to ride this strong momentum using the GMCR February 85 Calls (QGM BQ), which we entered on January 5th for $5.00. After entering, these calls moved past $6.00, but then dipped back down to current levels around $3.70.
The recent dip in GMCR stock was triggered by concerns that they have two patents that could expire in 2012. But a closer look reveals that Green Mountain owns 33 domestic and 73 international Keurig-related patents. Looking specifically at the two expiring in 2012, which are associated with GMCR’s K-Cup portion packs, they already have pending patent applications associated with this technology. If they’re ultimately issued as patents, they could then carry expiration dates extending out to 2023. In other words, the recent concerns seem quite unfounded.
But even in the worst-case scenario, Green Mountain has already implemented a “Plan B” strategy by snapping up Diedrich Coffee and Timothy’s wholesale business. So, GMCR’s management is certainly taking a proactive role to ensure that their strong revenue stream continues. Once investors digest this reality, I think that GMCR could be back on the move. If GMCR can hop above the $80.84 level, I’d look to add to our calls. But until then, let’s sit tight.
In the meantime, it’s time to move on FedEx (FDX – NYSE). Since I outlined the strategy parameters in your last alert, let’s simply get positioned now!
PLAY: Buy the FDX February 85 Calls (FDX BQ) at or under $2.55, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $3.30.
And as always…
Lock and load!
Sincerely,
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