NEW DIRECTIONAL PUT PLAYS
SodaStream - SODA - close: 36.12 change: -0.42
Stop Loss: 37.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below
Why We Like It:
SODA has been trending lower with a bearish pattern of lower highs for weeks. Yet now the stock is poised to hit new relative lows. Last week's lows were near $35.75. I am suggesting a trigger to buy puts at $35.65. However, we will want to keep our position size small. The most recent data listed short interest at 55% of the very small 17.7 million-share float. That raises the risk of a short squeeze should SODA manage a rebound.
Our target is $31.50 but we will plan to exit prior to the early November earnings report.
FYI: The Point & Figure chart for SODA is bearish with a $30 target.
Trigger @ 35.65
- Suggested Positions -
buy the Nov $35 PUT (SODA1217w35) current ask $2.45
Entry on October xx at $ xx.xx
Average Daily Volume = 528 thousand
Listed on October 11, 2012