Monster Beverage - MNST - close: 71.33 change: -0.47

Stop Loss: 69.90
Target(s): 77.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 5 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
MNST is in the consumer goods sector. The company makes "alternative" beverages and is probably best known for their Monster branded energy drinks. Potential legal issues regarding the alleged dangers of drinking energy drinks and marketing toward children have been a dark cloud over the company for a few years now. Yet the current rally in the stock price would suggest investors are not worried. The company has been rumored to be a takeover target with the most likely buyer being Coca-Cola (KO) although it's worth noting those rumors have been around for a while as well.

The stock's performance over the last two days is a bit worrisome but after such a big bounce MNST was due for a little profit taking. The stock bounced exactly where it should have today as MNST found support at prior resistance. I am suggesting we take advantage of this pullback and bounce and buy calls tomorrow. However, we want to keep our position size small to limit our risk.

*Small Positions at the opening bell*

- Suggested Positions -

Buy the MAR $75 call (MNST1422C75) current ask $2.15

Annotated Chart:

Intraday Chart:

Entry on February -- at $---.--
Average Daily Volume = 1.39 million
Listed on February 13, 2014