In addition to tonight's new trading candidate, check these out:
GMCR - this high-flying coffee stock has rebounded back toward its all-time highs. A breakout past the early August high of $111.42 can be used as an entry point. The move could spark another short squeeze. My concerns are the option prices. GMCR is so volatile that options are expensive to trade. (FYI: A failure here would look like a potential bearish double top)
UA - Shares produced their second rebound from the simple 200-dma for the second day in a row. Aggressive traders could buy this bounce with a stop under today's low. As an alternative, wait for a move past recent resistance near $73.30.
NEW DIRECTIONAL CALL PLAYS
PriceSmart Inc. - PSMT - close: 67.81 change: +0.81
Stop Loss: 64.65
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below
Why We Like It:
PriceSmart is a rival to the Costco and Sam's Club warehouse outlets. PSMT has locations in the U.S., the Caribbean, and Latin America. You'll notice that the stock has been pretty resistant to any of the market's most recent declines. This stock is actually trading at new all-time highs.
On a short-term basis PSMT is consolidating under resistance at $68.00. I am suggesting we use a trigger to buy calls at $68.25 with a stop loss at $64.65. It's possible the $70.00 level could be resistance but I'm setting our target at $74.00.
The Point & Figure chart for PSMT is bullish with a $77 target.
Trigger @ 68.25
- Suggested Positions -
buy the OCT $70 call (PSMT1122J70) current ask $3.60
Entry on September xx at $ xx.xx
Earnings Date 11/10/11 (unconfirmed)
Average Daily Volume = 307 thousand
Listed on September 12, 2011