Option Investor
New Plays

New Option Plays

Printer friendly version
Call Options Plays
Put Options Plays

New Calls

None today.

New Puts

Panera Bread - PNRA - close: 58.30 chg: -0.05 stop: 60.01

Company Description:
Panera Bread Company owns and franchises bakery-cafes under the Panera Bread and Saint Louis Bread Co. names. The Company is a leader in the emerging specialty bread/cafe category due to its unique bread combined with a quick, casual dining experience. (source: company press release or website)

Why We Like It:
Yesterday PNRA pre-announced its revenues for the second quarter and told Wall Street they expected earnings in the 32-33 cent range. Analysts were already looking for 33 cents a share so investors naturally sold the stock on this news. PNRA broke down under support near $60.00 and technical support at its 100-dma (where PNRA had bounced twice in April and May). We honestly expected an oversold bounce back toward the $60 level today but that failed to materialize. The lack of participation in today's market rally could spell bad news for bulls. Now that PNRA has let the earnings cat out of the bag the technical breakdown looks like a new entry point to buy puts. We are going to suggest buying puts with a trigger at $57.49. Our target will be the $52.50-51.00 range or the simple 200-dma (currently near $51.00), whichever PNRA hits first. Traders with more patience might continue to wait for a bounce back toward the $60.00 level and use a failed rally there as a new entry point. We are still going to exit this play ahead of its August 9th earnings report but more aggressive traders may want to consider holding over the report since PNRA has already pre-released some of its numbers. The odds of a surprise are a lot smaller now.

Suggested Options:
This is a very short-term play so we're only suggesting the August puts.

BUY PUT AUG 60 UPA-TL OI=1878 current ask $2.90
BUY PUT AUG 55 UPA-TK OI=3202 current ask $0.85

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/09/05 (confirmed)
Average Daily Volume = 601 thousand

New Play Archives