Trade Management: I got out for portfolio risk management and tactical technicals. Will look for another opportunity. Trade reinforced the value of the 10, 50 day and 200 MAs and our rule to look for a pop at the 50 day MA otherwise it heads to the 200 day.
In this trade we learned about “suspended animation” state that options premiums can remain in as a stock continues to go up in value as far as the direction of the option.
Trade Learnings: Don’t ever buy AIU. Go owner to GLD.
Trade: Buy to Open COLD JAN 15 2021 $30 Strike Call – Qty 2 @ $7.90 per contract.
Overview: Americold is the world’s largest publicly traded REIT focused on the ownership, operation, acquisition and development of temperature-controlled warehouses. Based in Atlanta, Georgia, Americold owns and operates 183 temperature-controlled warehouses, with over 1 billion refrigerated cubic feet of storage, in the United States, Australia, New Zealand, Canada, and Argentina. Americold’s facilities are an integral component of the supply chain connecting food producers, processors, distributors and retailers to consumers.
Thesis: If you believe in the e-commerce story and rising trends in grocery delivery then a company like COLD should benefit from these long-term consumer trends.
Financials: table below represents financial statements as reported by Finviz as of 6/23/20.
Price Targets: $38 per share is the initial price target slated to be achieved by 8/1/20. Secondary price target is $40 per share forecasted to be achieved by 11/1. The entry price was $36.20 so this would represent a 5.5% and 11.1% upside from the entry price, respectively.
Break-Even Price: $37.90 per share ($30 strike + $7.90 call price) which is 4.6% from the current price.
Technicals: it appears that the charts are establishing a new support trend line where prior resistance was achieved between the $34.50 – $36 range. A break below $34.50 and the velocity of the brake would indicate that we are continuing to hit resistance.
Timeframe: entered position on June 23, 2020 with a contract expiration of Jan 15, 2020. Review position with a focus on WEEKLY given the 6 month contract duration. On July 15th, 2020 you will remain in this trade if it’s still going sideways or if it shoots to the upside.
Stops / Exit Signals: you will look to begin pull the rip cord if the position goes below the 10 day MA established at entry point on 6/23 and you will certainly look to exit if the underlying stock goes below $34.50.