Posted on August 26, 2021
Pool Corp. (NASADQ:POOL) is the company that fills your swimming pool with chemicals that sting your eyes, kill your gut bugs and degrade your acid mantle.
But what the hey! – the stock is up.
What ever happened to men’s fashion?
To argyle shirts and the ubiquitous ‘vest’?
All of it.
And we’re all the worse for it.
POOL stock is now pushing the limits of rational securities discourse.
Lots of folks used the Batflu interregnum to build, remodel or otherwise futz with their swimming pools.
But that’s now come to an end, in our view.
And with it, any remaining strength in the stock.
Below, we’ve charted the daily action for the calendar year, 2021.
Pay attention to both RSI and MACD, in particular –
Technically, POOL is looking weak on a number of fronts.
And that says it all.
Now it’s time to drown in riches.
Like this –
A Jew and His Gold recommends you consider selling the POOL September 17th 480/490 CALL spread* for $3.70 (13.30/9.60) and buying three (3) POOL September 17th 440/430 PUT spreads** for $1.15 (2.05/0.90) each. Total credit on the trade is $0.25.
Rationale: no cost to trade and a big potential payday.
Entry to the trade pays us $0.25 and our maximum win is $30.25.
Max loss is $9.75, which is not the greatest danger here, considering recent price action.
The real risk is time.
With but three weeks remaining to expiry, our first worry is that we’ll run out of trading hours before the decline is complete.
And that’s why we’re labeling the trade SPECULATIVE.
But maybe G-d likes speculative…?
Many happy returns!