DOW Delivers 2277%… and Get Some Tobacco – Your Weight-Loss Wonder Cure! (BTI, DOW)

As this sucker goes up in smoke, we butt out with a fortune…

Welcome, good Jews and Noahides, to the greatest show on earth – the countdown to the final redemption.

It won’t be cheery and it won’t be fun, but if you’re on board at A Jew and His Money, you will be calmer, you will be smarter, and you’ll potentially more than triple your capital every year (if past performance is indicative of future returns – see HERE).

Good, clean fun – for all you dirty, dirty boys!

Anyway, before we get to today’s trade, we’ve got one to close for a whopping 2277% profit!

It’s our DOW initiative, whose details can be found HERE.

In brief, we’re holding the September 16^th 52.50 synthetic long and a credit of $1.06.

And…

The stock has moved strongly in our favor.  The long CALL can now be sold for $2.50 and the short PUT repurchased for $1.51.

Get it done and you exit with $2.05 NET on $0.09 spent.

And that’s a marvelous 2277% profit.

Dude!

And now we get to it.

There are a lot of things that smoking can assist you with, and the following is only a partial list.  For instance –

• Voice raspification,
• Skin and clothes dyeing,
• Suicide,
• Cough enablement,
• Insurance premium enhancement.

But nothing beats sparking up a Lucky to assist you with plain old, no-frills weight loss.

That’s right.  When your nerves are shot and the anxiety’s mounting, there’s always a friendly Camel waiting in its shiny sof-pac, calling out:

“Why eat, Hubert?  You’ve got a better option – a weight reduction option!  You needn’t buy that tin of Pringles to find comfort.  Just grab a match.  Maybe snag a coffee.  Smoke away the pounds.  Everything will be alright…”

They’re Safe and Effective!

Oh, my.

Anywho, cigarette maker, British American Tobacco, PLC (NYSE:BTI) has been something of a drag of late.

The largest tobacco marketer on the planet has seen its stock sitting in the NYSE ash-tray after deciding to play politics by pulling out of the Russian tobacco market.

They’re now looking for a buyer for the business, but the damage is already done.

BTI reported a £957 million hit (25% off its bottom line) at the half year mark, and analysts are expecting more to come.

A full 26% of the company’s global sales are sourced in the Russia/Ukraine region.

As for fundamentals, check it out –

• Currently, P/E is 14.31, but more importantly, Forward P/E is non-existent.  Analysts are expecting NEGATIVE earnings a year from now.
• Dividend Yield is 9.05%, if they can find the funds to pay for it.
• P/B is 1.01.
• More significantly, EPS for the coming quarter and year are expected NEGATIVE, and
• Latest Q/Q EPS are DOWN 45.50%.

In other words, the outlook is dire.

This is a very mature company that’s finding it difficult to expand its business and is therefore choosing to pay out cash to investors (hence the dividend) rather than reinvest in its future.

Now look at the daily chart –

Technically, we have –

1. An RSI overbought signal from February (circled, in red) that spooked the bulls into a serious drawdown.
2. Bears have had the momentum ever since (in purple), and…
3. Because both RSI and MACD have trended below their respective waterlines for some six weeks now (in green), it’s clear the bears are in control.
4. Price-wise, we have a descending triangle (in red) with support at $39.10.  Once that level is breached, it’s unclear how far the stock might fall.
5. Short-term moving averages (in blue) have both turned lower, and price is beneath them both.  The longer-term MAs have flat-lined and align perfectly with strong support at $39.10 (in red).

Now look at the WEEKLY –

Here, we have more bad news.

1. RSI gave a WEEKLY overbought indication in February (circled, in green).  This, coupled with the daily overbought, makes for an ominous outlook.
2. WEEKLY RSI also went sub-waterline at the end of June, while WEEKLY MACD stands poised to follow by week’s end.  When we get that bearish confirmation, a new round of selling should commence.
3. All WEEKLY MAs are declining (in blue) and support sits at roughly $38.70.
4. After that, a dump to 34 could quickly ensue (in black).

Our trade would reap a massive reward were that to occur.

But our goals are more modest.

See here –

A Jew and His Gold recommends you consider the sale of the BTI September 16^th 40/45 CALL spread* for a credit of $1.10 (1.20/0.10) and purchase of the BTI September 16^th 40 PUT for $1.05.  Total credit on the trade is $0.05.

[*Sell the 40 CALL and buy the 45 CALL.]

Rationale: first, our breakeven on the trade is $40.05, just $0.13 (0.7%) below the current price.

Max gain is $40.05 – if everyone kicks the habit.

Max loss is $4.95 (difference between the CALL strikes less the initial credit).

We expect the next step lower to transpire before month’s end.

And remember, good Jews and Noahides: the G-d of Israel examines the heart.

He sees and hears everything happening within.

No GOOGLE AI algorithm will ever come close to His Knowledge.

Nor will they ever reward or punish as He can.

Praise His Holy Name!

Many Happy Returns!

Matt McAbby

Follow @HughLOHaynew