NEW DIRECTIONAL CALL PLAYS
Whole Foods Market, Inc. - WFM - close: 50.17 change: +0.71
Stop Loss: 48.75
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 4.9 million
Entry on January -- at $---.--
Listed on January 07, 2014
Time Frame: 8 to 12 weeks
New Positions: Yes, see below
Why We Like It:
WFM is in the services sector. As of November 2014 the company had 401 stores in the U.S., Canada, and the United Kingdom. Founded in 1978, WFM has become synonymous with healthy, organic food, at least for a growing portion of the population.
In early May 2014 the stock was crushed when the company missed Wall Street's earnings estimates and lowered its 2014 guidance. Investors were very unhappy with WFM's same-store sales growth as well. The organic food space has been growing more competitive in recent years as other retail groceries seek to boost their profits with wider margin "organic" fare.
WFM spent months languishing in the $36-40 zone before finally surging in early November. The big rally was sparked by better than expected earnings results and management raising their 2015 guidance. Shorts panicked and the stock exploded higher.
WFM has been slowly working its way higher since then but now WFM looks poised to breakout past key resistance at the $50.00 level.
The huge drop in gasoline prices is very bullish for the U.S. consumer. They now have more money in their pocket that they can spend on other items, like high priced organic foods at WFM.
Traders have started buying the dip and shares hit an intraday high of $50.18 today. Tonight we are suggesting a trigger to buy calls at $50.30. We will plan on exiting prior to WFM's earnings results in mid February.
Trigger @ $50.30
- Suggested Positions -
Buy the FEB $50 CALL (WFM150220C50) current ask $2.18
Option Format: symbol-year-month-day-call-strike