Buy Alert: November 12, 2014
Buy Alert: November 12, 2014
Trade Details
Buy Kate Spade (KATE) December 20th 29 Calls for $1.55 or better
Why?
It’s holiday season once again, so time for retail stores to make their big push for profits in 2014. This year, high-end clothing retailers stand a better chance of over-performing than in past years. For one, the economy is in better shape than last year. What’s more, consumers should have extra money from substantially lower gas prices.
We’re going buy calls on KATE. The company recently reported strong 3Q earnings and raised comparable sales guidance to 19%-21% from 15%-17%. That certainly bodes well for the fourth quarter. Moreover, the stock has strong support right around $28.
Let’s buy the 29 calls in December. Conservative investors can take profits at $31.50. Aggressive investors can hold up to $34. For risk control, conservative traders should exit at $27.50, while more aggressive traders can hold down to $26.
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Category: OTW Buy Alerts
