בס״ד

Watch Now as Air and Gas Turn Into ROCKS! (APD)

Posted on November 15, 2021

Today’s trade comes to you from a place of air separation, gasification, liquefaction and non-cryogenic generation.

Intrigued?

What ever happened to the tried and true

ways of our grandparents…?

Anyway, our trade is underpinned by Air Products and Chemicals, Inc. (NYSE:APD), purveyors of state-of-the-art equipment that accomplishes all of the above chemo-physical nonsense, as well as the actual specialty gases and ‘air products’ (for G-d’s sake!) that the modern world apparently so desperately needs.

Can you believe this?

Let’s Talk Fundamentals!

  • APD comes with a P/E of 34.00,
  • A Dividend Yield of 1.94%, and
  • A Price to Book ratio of 5.25 (too high).

  • Sales have grown by an anemic 2.50% for the last five years,
  • But the latest quarter did beat estimates by 26.10% – after continued downgrades lowered expectations dramatically (so we’re not so impressed).

Take a look at the daily chart for the last six months, and pay particular attention to the 26% asymptotic climb of the last six weeks –

Technically, we’ve got problems –

  1. A chronic RSI overbought condition for the last six weeks (in green) is rotten unhealthy,
  2. While MACD, too, looks ready to roll lower.  Taken together, they indicate a relatively strong sell signal is now upon us.
  3. Price-wise, a six-week rising wedge pattern (in red) is bearish, and will provide a full bore sell indication when the lower edge of the wedge is broken (now at 307 and rising).
  4. The end of last trading week also provided a bearish engulfing pattern at the highs (in black), a further indication that the turn is upon us.
  5. Numerous gaps will also have to be filled (in blue) on any retracement.
  6. Next support arrives at the 137 DMA at 286.

And it’s for all the foregoing that we now offer the following wunderbar trade for your consideration –

A Jew and His Money recommends you consider selling the APD January 21st 300/310 CALL spread* for a credit of $4.20 (14.90/10.70) and purchase the APD January 21st 310/300 PUT spread** for $4.80 (11.70/6.90).  Total debit on the trade is $0.60.

[*Sell the 300 CALL and buy the 310 CALL.  **Buy the 310 PUT and sell the 300 PUT.]

Rationale: In order for the trade to reap its maximum profit of $9.40 – on an expenditure of just $0.60! – we need to see a decline of just 3.4%.

We see those as great odds, especially considering the technical condition of the stock at present, as well as the fragility of the broader market.

Maximum loss on the affair is $10.60 (difference between the CALL strikes plus the initial debit).

We see the likelihood of an early closure on this one as very high, and we’ll do so should the stock approach current support at 286.

The G-d of Israel is now bringing to light the evility and mendaciousness of the so-called global elite.  In Hebrew it’s referred to as the beirur, and the prophets used the term to describe a ‘sifting’ or ‘clarifying’ process, whereby the good and evil of this world are brought into sharp focus, and everyone gets to choose a side.

It will affect our investments, too.

With the worthy profiting.

And the less worthy… less so.

May His glory be known through our work!

With kind regards,

Hugh L. O’Haynew

 

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