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Nothing Could Be Finer Than Tectonic-Sized Decliners in The Ma-a-ar-ket. THREE Lightning Strikes! Jackpot Takeaways of 3500%, 587% and 162%! (AMR, KTB, KHC, CALM)

Posted on May 19, 2022

We had initially planned a bottle-cracking CocaCola trade for today, but yesterday’s action undermined it.  Coke spilled seven percent on the day, and we had to open the fridge anew to quench our profit-thirst.

But before we get there, we’ve got three beauties to close.

—————————————-

We start with our KTB trade, whose details can be found HERE.

In brief, we’re holding a credit of $5.52 and two (2) short KTB June 17th 40 CALLs.

And…

It’s time to close.

Buy back the CALLs for $1.30 each and you step away with $2.92 NET on an initial debit of $1.80.

And that’s 162%.

Next up is our KHC initiative, set on April 25th in a missive called Deliverance! Massive Profit Splash as Egyptians Drown in the Sea!  You’ll remember that we urged you to sell the KHC May 20th 43/46 CALL spread for $1.00 and buy the KHC May 20th 44.50/43.00 PUT spread for $1.00.  Net Zero Premium was the result.

And now…?

Dump it.

Sell the PUT spread for $1.05 (5.20/4.15) and buy back the short CALL for $0.02, and you take $1.03 Net to the bank on NOTHING spent.  Adjusted for minimal commissions gives you a robust 587%.

In less than a bleeding month!

Finally, we’re closing our CALM trade, which graced your inbox on April 11th.

The letter was titled Jews Leave Egypt With Riches Galore! Cal-Maine On Deck, and it urged you to sell the CALM May 20th 52.50/55.00 CALL spread for $1.10 and buy the CALM May 20th 55.00/52.50 PUT spread for $1.15.  Total debit on the affair was $0.05.

And…

Today, you can buy back the short CALL for $0.20, and we say do it.

Then sell the PUT spread for $2.00 (9.10/7.10).

When all is said and done, you mosey on out with $1.75 NET on a nickel laid out.

And that’s a very fine 3500%.

AND NOW, FOR TODAY’S TRADE

It’s a commodities investment advisory, dammit, and that’s what we’re delivering.

Now get a load of this –

Alpha Metallurgical Resources (NYSE:AMR) is a coal mining company diggin’ the dirt in Virginia and West Virginia.  They’ve had a ridiculously successful run since incorporating, flying the stock from less than ten bucks a share in July 2020 to almost $180 two weeks ago.

But it’s too much.

We’ve been stalking these criminals for several months now, awaiting our entry, and yes, the time has arrived for a takedown, good Jews and Noahides.

The G-d of Israel is long-suffering, but He neither slumbers nor sleeps, and He’s awakened us today to the opportunity to cash-in handsomely from these bearers of Appalaichian char.

Here’s the nitty-gritty numbers on AMR –

  • P/E is (allegedly) 4.10,
  • Dividend Yield is 0.98%,
  • Price to Book is 3.05, but
  • More materially, perhaps (because we’re dealing with a miner), Price to Free Cash Flow is 6.23.

Now all those numbers are dandy-good, but we don’t believe them at all.

Partly because of what we see, and partly because of THIS.  Apparently an evil short-selling group has targeted the company with false accusations…

Hmm…

  • Not to mention that insiders have unloaded $23 million worth of their holdings in last six months (13.08%). But perhaps more importantly, $22 of those millions were dumped in just the last 60 days – as the walls began to tremble and the shares began choking on soot.

AMR, in our humble opinion, is ready for the coking plant.

Here is the chart –

Technically, the picture is thus –

  1. RSI was way overbought in early March (in green),
  2. Setting off strong negative divergence against price from both the RSI and MACD indicators (green arrows).  That means buying momentum is on the wane.
  3. RSI should go sub-waterline any day now, triggering a powerful wave of selling when it finally occurs (circled, in red).
  4. Volume is consistent with rampant distribution, aided in part by insiders, to be sure (in black).
  5. Price-wise, a ridiculous 350% rise in less than half a year now finds itself parabolically-challenged, skimming above the short-term moving average and barely holding the lower edge of a rising trend channel (in red).
  6. In short, AMR is way above where it’s natural growth lines would have it (in blue), and the short sellers may just have a point…

Count us in!

We’re trading this sucker like it should be –

A Jew and His Gold recommends you consider setting the AMR June 17th 165 synthetic short* for a debit of $15.40 (24.50/9.10).  Set a STOP buy on the shares at 165 to avoid any runaway loss.

[*Buy the 165 PUT and sell the 165 CALL.]

Rationale: The short begins in-the-money by a full $12.27, and our breakeven on the trade arrives at $149.60, just $3.13 below the current price (just 2.04%).

Maximum gain on the trade is unlimited$149.60, that is, should AMR go bust.

Maximum loss – with protective STOPs in place – is $15.40 (our initial debit).

Feel free to place the STOP lower if that figure is beyond your parameters.

And may the G-d of Abraham, Isaac and Jacob bless you and yours.

Many happy returns!

Matt McAbby

 

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