Jews Pull Off Massive Profit Snatch – Again! Two Huge Winners to Close – 1850% & 888% – And Not a Moment to Lose! (ABBV, MTZ, AXP)

We’re going to launch a hypersonic guided missile today toward the ham sandwich, pill pushers at AbbVie Inc. (NYSE:ABBV) and earn for all you noble Jews and Noahides a healthy batch of scratch to buy lots of unnecessarily inflated consumer goods!

But first! –

We’ve got two to close for a shower of cash, thank G-d.

First up is our MTZ initiative from December 30^th.  The dispatch was called There’s a Hole in the Bucket, Dear MasTec…, and it urged you to sell the MTZ April 14^th 85/90 CALL spread for $2.30 and buy the MTZ April 14^th 90/85 PUT spread for $2.40.  Total debit on the trade was a dime.

And today…?

The CALL spread can be repurchased for $1.25 (1.75/0.50), and the PUT spread sold for $3.20 (12.40/9.20), leaving you with a NET takeaway of $1.85 on just ten cents laid out.

That’s 1850%.

And that’s a fact.

Our next profit wallop comes from AXP, via a communiqué entitled Spastic Plastic that landed in your mailbox on February 21^st.

The trade recommended that you sell the AXP March 18^th 185/190 CALL spread for $3.15 and buy the AXP March 18^th 195/185 PUT spread for $3.65.  Total debit on the affair was $0.50.

And then…

As of last night’s close, the CALL spread can be repurchased for $1.91 (3.80/1.89) and the PUT spread offloaded for $6.85 (15.40/8.55) for a grand total, two-handed NET grab of $4.44 on just $0.50 spent.

That’s 888%.

And it was worth waiting TEN DAYS to accomplish it.

And now we turn to today’s victim…

But before we do… 

Remember: all the money you make here should be devoted to the furtherance of Torah study and the spread of G-d’s Truth, lest the Holy One, Blessed Be He, dry up your winnings like a New Mexico river bed.

Torah learning, good Jews and Noahides.  For your sons and daughters.  For the Avreichim who need your support.  For yourself.

That’s the only reason Hashem gave you these winnings!

Now do it right.

The pharma-criminals at ABBV reported better than expected earnings one month ago to the day, and that set the stock into a locomotive stupor that’s now run its course.

Our tea-leaves tell of a share price that could lose roughly 15% over the near-term, and our trade for the day offers a 3471% return for less than $0.30 invested.

And we don’t even need the full 15% decline to pocket it.

Onward to Fundamentals!

• ABBV trades with a P/E of 23.19 and a forward P/E of just 12.19, according to consensus.  That means either price gets cut in half over the next twelve months or earnings double.  Take your pick.
• Dividend Yield is healthy at 3.77%,
• Price to Book is a drugged-out 17.21,
• Long-term Debt to Equity is an addictive 4.98!!!
• And while EPS have grown at a 12.20% rate over the last five years,
• Next year, they’re expected to DECLINE by 12.99%, according to analysts.
• And perhaps that’s why insiders sold $77 million worth of stock in last six months (26.05% of their hoard) – a full $15 million of which was dumped in just the last three days!

Have a look at the chart –

Let’s talk technicals –

1. First, an overbought RSI read in mid-December (circled, in red) took the steam out of the bulls; price has been diverging from both RSI and MACD ever since (green arrows).  That’s a sign of increasingly bearish momentum.
2. We note here that WEEKLY RSI also registered an overbought reading two weeks ago and remains there through this day (not seen on chart).
3. Beyond that, price is now coiling higher in a tighter band and forming a bearish rising wedge in the process (in red).  This formation is extraordinarily reliable and always results in a meaningful decline when the lower trendline is broken.  We believe that eventuality is just days away – particularly if insiders continue with their latest selling binge.
4. The short-term MA at 142 (and rising) provides first support.  After that, we see a decline to the 130-135 range, where Fibonacci retracement levels reside.
5. The rise was simply too fast, and separated from its long-term MA by a rate that wasn’t tenable (in blue)

And that’s why we’re now acting thus –

A Jew and His Gold recommends you consider selling the ABBV May 20^th 140/145 CALL spread* for a credit of $3.15 (12.50/9.35) and buying the ABBV May 20^th 145/135 PUT spread** for $3.43 (6.10/2.67).  Total debit on the affair is $0.28.

[*Sell the 140 CALL and buy the 145 CALL.  **Buy the 145 PUT and sell the 135 PUT.]

Rationale: we’re looking at a return of $9.72 on just $0.28 invested.  That’s a potential NET take of 3471%.

Max loss on the trade is $5.28 (difference between the CALL strikes plus the initial debit).

Breakeven arrives at $142.22.  And we have eleven weeks to get there (current price is $149.57).

Again, we thank the market for some very reasonable spreads in helping us craft this one.

The Al-mighty examines all our deeds.

You cannot escape his omniscience.

Be good!

Many happy returns!

Matt McAbby

Follow @HughLOHaynew