Posted on May 2, 2022
The Dollar Tree (NASDAQ:DLTR) is the source of our money-making alchemy today, and just in time, too!
It appears a great number of youthful George Washington’s are now grinding their axes, readying themselves to fell what they see as a stock that’s grown ridiculously quickly to heights unimaginable and is now fit only for the wood stove.
We’ll get there, friends, but first, we have one to close.
It’s our Kroger trade, whose details can be found HERE.
To sum, we’re holding the KR May 20th 55 synthetic short, along with a $0.27 debit.
Well, the synthetic short can now be closed* for a credit of $1.13 (2.44/1.31), and we say do it.
Execute, and your take is $0.82 NET on just four cents spent.
And that’s a very juicy 2050%.
Like pulling a rabbit out of a hat…
A hearty congratulations (again) to subscriber Arjun, who jumped out at the close on Friday and caught the day’s lows (and apparently also had several pairs on).
…Don’t we feel every bit the proud father.
As mentioned, we’ve got a new light rail to financial freedom leaving every Monday and Thursday morning. And today’s ticket’ll buy you a potential 4900% win.
If she moves like we want.
So here are the fundamentals of Dollar Tree stock – and remember this is a retailer, albeit in an inflationary environment with lots of cheap Chinese merchandise.
But that didn’t stop the buyers, who filled the parking lots over the last few months and talked (incessantly) about how inflation is going to make DLTR grow to the sky!
The daily chart, please –
Technically, the outlook is negative.
And if that weren’t enough…
The weekly chart is also damning.
Take a look –
And that’s how we’ve developed our trade.
Even a mild decline will give us the full bunny cake.
Check it out:
A Jew and His Money recommends you consider selling the DLTR May 20th 157.50/160 CALL spread* for a credit of $1.20 (8.40/7.20) and buying the DLTR May 20th 160/157.50 PUT spread** for $1.25 (4.70/3.45). Total debit on the affair is $0.05.
Rationale: The Al-mighty G-d of Israel, Who neither slumbers nor sleeps, is offering us a chance to cash in to the tune of 4900% on a five cent flip.
Get down on your knees and say ‘thank you’.
Moreover, max loss is a modest $2.55 (difference between the CALL spreads plus the initial debit).
Breakeven on the trade arrives a paltry 2.3% below the current stock price, at $158.70.
And the full Viennese Strudel is served at $157.45, a mere 3.0% below the current price.
And ain’t that just a wonder.
G-d bless all you good Jews and Noahides.
With kind regards,
Hugh L. O’Haynew