Using Weakness to Our Advantage
Time to Go Back into GMCR
PLAY: Buy the GMCR February 85 Calls (QGM BQ) at or under $3.20, good for the day. Place a protective stop limit at $2.10 and a pre-determined sniper sell at $5.50.
Dear Bottarelli Research Member,
It’s been quite a week for Green Mountain (GMCR – NASDAQ).
As a brief summary, the stock popped aggressively on Wednesday after receiving an upgrade and a $110 price target from Roth Capital. Then on Thursday, the stock gave back all of those gains when antitrust authorities requested more information about GMCR’s proposed acquisition of Diedrich Coffee. In response, Green Mountain and Diedrich said that they expect to respond promptly to the second request for information from the U.S. Federal Trade Commission. And then today, even as the dust is still settling, shares of GMCR are flirting with a strong support level right at $80.00.
From a trading perspective, if the $80.00 support level holds (which I think it will), this would represent a fantastic entry point. After all, if it wasn’t for the FTC news on Thursday, GMCR would’ve been hitting new highs. Therefore, let’s use this news, combined with the market weakness, to buy the dip. If prices stabilize, GMCR could very easily jump back into its upside trend.
PLAY: Buy the GMCR February 85 Calls (QGM BQ) at or under $3.20, good for the day. Place a protective stop limit at $2.10 and a pre-determined sniper sell at $5.50.
At the same time, maintain your FDX February 90 Calls (FDX BR) and your WHR February 85 Calls (OFW BQ). As we’ve all seen before, the markets have been known to pop right when everyone’s expecting a breakdown. Therefore, it behooves us to remain positioned to the upside. But just to cover ourselves, also maintain your FAZ February 17 Calls (FEW BQ) for more financial sector weakness.
NOTE: The markets are closed next Monday for Martin Luther King Day, so there will be no trading alerts on January 18th. Unless something happens with our positions for the rest of today, your next alert will hit on Tuesday, January 19th.
Until then, enjoy your extended weekend. And as always…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.
Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.
CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.