NEW DIRECTIONAL CALL PLAYS
Tractor Supply Co. - TSCO - close: 60.96 change: +1.62
Stop Loss: 58.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below
Why We Like It:
The RLX retail sector (+2.4%) lagged behind the S&P 500 (+2.8%) today. Yet that didn't stop TSCO from breaking out past resistance near $60.00. The stock has been consolidating with a bullish trend of lower highs and traders just bought the dip near its 200-dma on Friday. Today's breakout could signal a move toward the next level of price resistance near $65.00. However, I need to point out that the 50-dma and 100-dma could be technical resistance in the $62-64 area.
I would consider small bullish positions now but only if TSCO and the S&P500 index both open positive tomorrow morning. If the trade is opened we'll use a stop loss at $58.75. Our first target is $64.75.
NOTE: The September options expire in less than there weeks. If TSCO does not see any follow through higher these will evaporate fast. The spread is a larger percentage of the overall trade with the Septembers.
*See Entry Details Above*
- Suggested Positions -
buy the SEP $65 call (TSCO1117I65) current ask $0.65
- or -
buy the OCT $65 call (TSCO1122J65) current ask $2.10
Entry on August xx at $ xx.xx
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 858 thousand
Listed on August 29, 2011