Posted on December 9, 2021
Before we get to today’s hum-doozy, we have another trade to close for a pretty penny.
It’s our CAR initiative, the details of which can be found HERE.
To sum, we’re holding a $7.50 credit on the trade and the February 18th 260 synthetic short.
And with price today at $248.15, we’ve a hunch it’s time to close.
The short CALL trades for $42.20 and the long PUT for $49.60.
Buy back the first and sell the second, and you pocket an additional $7.40 to add to your existing $7.50 – for a NET take of $14.90!
For those who followed this one from the beginning (it cost a buck to open), your profit is an automotive 1390%.
Drive it wherever you want.
We’re pursuing the filthy Midianite thieves at Church and Dwight today (NYSE:CHD), those same crooks who hail from the Soap and Cleaning Materials industry, but whose dirty methods we shortly plan to expose.
CHD’s brands include the popular Arm & Hammer line, Aim toothpaste, Oxi Clean, and something called Trojan.
Apparently for horses.
Anyway, let’s look at some fundamentals.
And is there a CHD product to deal with that sort of alluvium…?
Now, we know that earnings came in stronger than expected back at the end of October.
And we know that a day before (on October 28th), management approved a new share-buyback plan of up to $1 billion – just before the insiders started selling!
So, it could be there’s more selling to come – along with more buybacks.
But it’s very unlikely that price will move higher from here.
Because why would those insiders have sold?
Have a look at the chart –
Technically, we have –
All told, it looks challenging for CHD in the near- to mid-term.
We’ve therefore crafted a trade that stands to profit handsomely from a very mild retracement.
And it looks like this –
A Jew and His Gold recommends you consider selling the CHD January 21st 95/100 CALL spread* for a credit of $1.70 (2.65/0.95) and buying the CHD January 21st 95/90 PUT spread for $2.10 (3.00/0.90). Total debit on the trade is $0.40.
Rationale: this is a setup that will pay $5.00 for $0.40 expended ($4.60 NET). That’s an 1150% payout (max), if it works.
Max loss is $5.40 (difference between the CALL strikes plus the initial debit).
A pullback to 90 (where price was just last week) will give us the win we’re looking for.
We’ve got 43 days to realize the win – not as long as we usually set for our trades – but the risk/reward profile was just too good to pass up.
And just a 5.2% decline will pay us in full.
K-el Shaddai, help us. And let Mashiach ben Yosef be revealed!
Many happy returns!