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Whole Foods Mkt - WFMI - cls: 129.62 chg: -5.89 stop: 133.01

Company Description:
Founded in 1980 in Austin, Texas, Whole Foods Market is the world's leading natural and organic foods supermarket and America's first national certified organic grocer. In fiscal year 2004, the company had sales of $3.9 billion and currently has more than 170 stores in the United States, Canada, and the United Kingdom. The Whole Foods Market motto, "Whole Foods, Whole People, Whole Planet"(TM) captures the company's mission to find success in customer satisfaction and wellness, employee excellence and happiness, enhanced shareholder value, community support and environmental improvement. Whole Foods Market, Harry's Farmers Market, and Fresh & Wild are trademarks owned by Whole Foods Market IP, LP. Whole Foods Market employs more than 35,000 team members. (source: company press release or website)

Why We Like It:
We like WFMI as a bearish candidate because it looks like a big target for profit taking. If the major averages see any follow through on today's ominous technical breakdowns then investors might start to panic and try to lock in profits on WFMI. Longer-term the stock is still in a strong, rising trend but short-term today's decline just broke its recent upward consolidation. We see a bearish divergence with its MACD plus its short-term technical oscillators are now bearish. Meanwhile WFMI's weekly chart technicals are bearish and its Point & Figure chart is bearish with a $114.00 target. Our plan is to buy puts with the stock under the $130.00 level. The $125.00 level should act as short-term support, especially with the 100-dma nearby. We are suggesting that readers exit half their position near $125.00. Then hold on to the second half and target a decline toward $120.00. Our official targets will be $125.50 and then $120.50.

Suggested Options:
We are suggesting the November puts.

BUY PUT NOV 130.00 FMQ-WF OI=1065 current ask $6.80
BUY PUT NOV 125.00 FMQ-FW OI=1271 current ask $4.60

Picked on October 05 at $129.62
Change since picked: + 0.00
Earnings Date 11/10/05 (unconfirmed)
Average Daily Volume = 983 thousand
 

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