Reward: $4.85 if the stock reaches or goes over 75
Break-even: $70.15
Why I like this: This stock has been in a solid bull channel for a year so I don’t mind the poor risk reward ratio. The recent earnings missed its mark, but I believe a change in macro prices may have made Cracker Barrell eat some of it’s cost, which to me is great management. I expect the stock to continue to grow and analysts expect increased earnings and revenue. The 65 – 70 strange is priced at $7.20, a 10% move, and a measured move target of 57.80 – 77.20.
Associate Jim’s Trade
Trade: Buying 65 lots RIMM Sep 28th (Wkly) 7.5-8 Call spread for $0.15
Risk: $15.00 per 1 lot
Reward: $35.00 per 1 lot
Breakeven: $7.65
The stock is up around 14% in the past few days and I think the trend will continue. The measure move target is around $0.90 and historically RIMM moves a lot on earnings. The stock has tested recent lows around $6.20-$6.25 a few times and bounced back. I think the new Blackberry could compete with other smartphones on the market.
Alex Kalish has a masters in Economics from Suffolk U. Email: AlexK@KeeneOnTheMarket.com
James Ramelli B.S. in Finance from UIUC. Email: James@KeeneOnTheMarket.com