Sysco Corporation (SYY) is a distributor of food products to restaurants, healthcare facilities, and hotels in North America. The company’s stock is currently trading around $33.80 in a 52 week range of $30.55-$36.05. The stock has been underperforming the market this year having added only 7% to share prices year to date. Despite its underperformance this year we have seen some very bullish options activity this week in SYY. Yesterday nearly 10 times the average daily option volume in SYY traded with most of that volume coming from heavy call trading in January. By the close nearly 6,000 Jan 34 calls and 14,000 Jan 35 calls had traded in SYY. These traders seem to be betting on continuation of the move SYY saw after they reported earnings on November 4th. With shares of SYY now trading above the cloud and the future cloud sloping upward we believe that this activity signals a great opportunity for a long stock swing trade.
Trade: Buying SYY stock at $33.80 with a stop at $32.20
Risk: $1.60 per share
Target #1: $34.60
Target #2: $35.40
Target #3: $37.00
