NEW DIRECTIONAL CALL PLAYS
Buffalo Wild Wings, Inc. - BWLD - close: 120.34 change: +1.13
Stop Loss: 118.40
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on Oct. 29th
New Positions: Yes, see below
Why We Like It:
Thus far 2013 has been a great year for BWLD. Most of the analyst commentary on the stock seems to be positive. Wall Street does not seem worried that McDonald's (MCD) has launched a new product called "mighty wings" that might compete with BWLD.
Shares surged back in early October on what looked like short covering and a spike to $121.13 on October 2nd. Since then BWLD saw some profit taking. However, traders jumped in to buy the dip and now BWLD is testing resistance near its early October high.
The most recent data listed short interest at 9% of the very small 18 million share float. A breakout to another new high could spark more short covering.
More aggressive traders may want to buy calls if BWLD can trade above $121.25, which would be a new high. I want to see a bit more follow through since a failure here would look like a potential bearish double top pattern. Tonight we're suggesting small bullish positions if BWLD can trade at $122.00. If triggered we'll start with a stop loss at $118.40. Our target is $129.00.
Trigger @ 122.00 *small positions*
- Suggested Positions -
Buy the NOV $125 call (BWLD1316K125) current ask $3.70
Entry on October -- at $---.--
Average Daily Volume = 324 thousand
Listed on October 15, 2013