The stock is a historically strong performer on earnings, rallying 5 of the past 8 quarters. Currently the options market is implying a move of around 5.2% by September expiration. With the strong chart and historical performance in the stock we believe that KR is primed for a rally on earnings.
Trade:
Buying the KR Sep 38-39 Call Spread for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Breakeven: $38.30