Add GMCR Calls
Play Another Earnings Run
PLAY: Buy the GMCR February 85 Calls (QGM BQ) at or under $4.40, good for the day. Place a protective stop limit at $2.10 and a pre-determined sniper sell at $6.70.
Dear Bottarelli Research Member,
In preparation for next Wednesday’s earnings report, I think it’s time to toe the water in Green Mountain Coffee Roasters (GMCR – NASDAQ). If you recall, the last time we played GMCR going into earnings, the stock shot straight up in the days leading up to their announcement. Looking at the chart today, which is giving off a bullish signal on an otherwise very weak market day, it looks like history is once again repeating itself. Therefore, let’s carefully add a new upside call position now – and look for continued upside momentum leading into GMCR’s Wednesday afternoon earnings report.
PLAY: Buy the GMCR February 85 Calls (QGM BQ) at or under $4.40, good for the day. Place a protective stop limit at $2.10 and a pre-determined sniper sell at $6.70.
NOTE: Unlike other earnings plays, the strategy here is to ride the momentum leading into the report, and then sell off our calls for a profit just before GMCR announces. That way, we can lock in a winner without subjecting ourselves to any directional risk from the announcement. As always, I’ll guide you through it every step of the way.
In other news, continue to hold your VMW February 45 Calls (VMW BI) and VMW February 43 Puts (MKT NH). The combined basket is slightly profitable leading into their Monday afternoon earnings report. If I were to guess, it looks like VMW is setting up for a tremendous upside move off the 50-day moving average. But as always, pegging an earnings move is always a coin-flip scenario. Therefore, maintain both sides of the position going into Monday.
And as always…
Lock and load!
Sincerely,
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