Buy Alert: September 6, 2013
Buy Alert: September 6, 2013
Trade Details
Buy Outerwall (OUTR) October 2013 $62.50 Calls for $1.75 or better
Why?
OUTR is the company formerly known as Coinstar and operates Redbox among other kiosks. It’s a fundamentally sound company which happens to be a favorite of shorts sellers.
The short sellers have had the upper hand lately, and OUTR has fallen below its 50-day and 20-day moving averages. The stock is about to hit a major trend line which should provide resistance. Basically, OUTR has traded in a fairly narrow channel and is now about to reach the bottom of that channel.
We’re going to buy October calls in anticipation of the stock bouncing off the bottom of the channel. The prospect of a short squeeze also gives this position a chance for significant upside should some positive catalyst occur.
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Category: OTW Buy Alerts
