NEW DIRECTIONAL CALL PLAYS
Whole Foods Market - WFM - close: 93.17 change: +0.75
Stop Loss: 91.40
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on Feb. 13th
New Positions: Yes, see below
Why We Like It:
WFM is a high-end grocery chain. The stock has been correcting lower since its peak in October last year. However, traders bought the "dip" when WFM neared a long-term trend line of higher lows (see weekly chart below). Now the stock has broken higher above a three-month trend line of resistance (see daily chart).
I still see potential resistance in the $93.50-94.00 zone, along with the 100-dma and 150-dma both near $94.00. Therefore I am suggesting we wait and use a trigger to buy calls at $94.25. If triggered our target is $99.50.
We do not want to hold over the Feb. 13th earnings report.
NOTE: because of a previous dividend the option strike for February is an odd one (95.50)
Trigger @ 94.25
- Suggested Positions -
buy the Feb $95.50 call (WFM1316B95.5) current ask $1.61
Entry on January -- at $---.--
Average Daily Volume = 1.5 million
Listed on January 23, 2012