Posted on September 5, 2022
Check Point Software Technologies Ltd. (NASDAQ:CHKP) operates in that dark web space between security and surveillance.
The Israeli company was the first to introduce the “firewall” to the online security industry and has since been a leader in cloud security efforts for any and all who operate in that realm.
But nobody seems to care…
And that’s evident in the stock’s price action over the past six months.
But before we get there, have a gander at the company’s fundamentals –
More on that in a moment.
In the meantime, take a good look below at the support line on the descending triangle that we’ve highlighted.
It’s unclear who’s doing the buying every time price drops to the 116 range; as mentioned, insiders own a full quarter of the shares, while institutional investors account for another 71%.
That leaves just 4% of the float in the hands of the public, and that, in turn, raises doubts about who exactly would have an interest in moving the stock lower from here.
Have a look at the chart –
Technically, you can see…
And it’s for all the foregoing, that we’re now recommending the following action be taken against the programming schlemazels from Tel Aviv –
A Jew and His Money recommends you consider selling the CHKP October 21st 115/120 CALL spread* for $2.20 (5.80/3.60) and buying the CHKP October 21st 120/115 PUT spread** for $2.50 (5.60/3.10). Total debit on the operation is $0.30.
Rationale: for $0.30 we get a chance to take home $4.70 (1567%) – on a relatively small move.
Breakeven on the trade arrives at $117.20, just $0.41 (three tenths of one percent) below the current market price.
With a decline of just 2.2% we take home the full $4.70.
And that looks just fine from here.
We’ll leave that to the Al-mighty.
May He judge us favorably this year and in all coming years.
With kind regards,
Hugh L. O’Haynew