Posted on March 15, 2021
Hard to get excited about flying sea creatures and paying hard-earned cash to get yourself drenched.
But SeaWorld Entertainment (NASDAQ:SEAS) makes a business of exactly that.
If you can call it a business…
Truth is, SEAS has run into some rough waters of late, as we expected they would. So you can imagine our salty cravings just eyeballing an opportunity to sail a windy profit from her soon-to-be capsized wreck.
Now, hold on to your jibs, gentlemen, as we walk you through the fundamentals here.
Or, in this case, what you might call a fundamental lack.
Get a load –
But that never hurt anyone in today’s heady investment climate.
Nor did –
The big splash seen on the chart of roughly a month back – when the stock spouted higher by better than 50% – was a result of an announcement that several SeaWorld locations would soon be opening.
Not advance killer-whale ticket sales.
Here’s the daily chart –
Technically, pay attention to –
Not a sea cow to be milked for cash, in our opinion.
And the weekly…?
We foresee a decline to at least $35, and we therefore urge the following –
A Jew and His Money recommends you consider setting the SEAS June 18th 55 synthetic short* for a debit of $4.70 (4.70/9.40). Set a STOP buy on the stock at 55.
[*Sell the 55 CALL and buy the 55 PUT.]
Maximum loss – with proper STOPs emplaced – is $4.70.
Maximum gain is unlimited.
Breakeven on the trade is $50.30 (just 0.8% below the current price of $50.74).
As per usual, should the STOP buy be triggered, a new STOP sell should be entered at the same level (55) to keep the trade square. Should that be executed, a new STOP buy at 55 should be re-set.
A STOP should always be in place at 55 until we close the trade.
With kind regards, and Chodesh Tov!
Hugh L. O’Haynew