NEW DIRECTIONAL PUT PLAYS
The Fresh Market, Inc. - TFM - close: 48.26 change: -0.58
Stop Loss: 50.05
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below
Why We Like It:
TFM is in the grocery store industry and tends to get labeled as a rival for Whole Foods (WFM). Shares of TFM peaked in mid August. The stock was hammered on August 29th following its earnings report the night before. Earnings results were in-line with expectations but TFM lowered their 2014 guidance. Shares collapsed to support near $48.00. Now almost three weeks later the oversold bounce has failed and TFM is facing support near $48.00 again. This time the $48 level should have additional support with the simple 200-dma. That also means that a breakdown here would be pretty bearish.
The September 4th low was $47.71. I am suggesting a trigger to buy puts at $47.50. If triggered our target is $42.00. I am suggesting we keep our position size small because TFM can be a little bit volatile. Plus the most recent data listed short interest at 13% of its small 40.1 million share float.
FYI: The Point & Figure chart for TFM is bearish with a $39 target.
Trigger @ 47.50
- Suggested Positions -
buy the Oct $45 PUT (TFM1319v45) current ask $0.65
Entry on September -- at $---.--
Average Daily Volume = 591 thousand
Listed on September 16, 2013