Weekend Trader Alert
September 22, 2024
Open Positions Update
There are no portfolio updates this week.The following is this week's recommendation:
Five Below (FIVE)Place a limit order to buy the Five Below (FIVE) November 15, 2024 100-strike put at a limit price within range of the current market asked price when you place your order. At the close on Friday, September 20, this option was offered at $9.20. FIVE closed at $95.41 on Friday, September 20.Do not attempt to enter this position after Monday's close.Please use the following guidelines to manage the position:- Exit the position if the option is at a 100% gain from your entry price.
- If the option has not reached its target profit by 3:00 p.m. Eastern time on Monday, October 14, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Department store name Five Below (FIVE) was just rejected at the round $100 level, which coincides with its -50% year-to-date mark and its 20-week moving average. This region was also the gap-down level from the CEO’s resignation on July 16th.
To make matters worse, FIVE finished the week with an inverted hammer pattern on the weekly chart. Now stalling, the shares are starting to turn near a call stack at the 95- and 100-strikes for October and November expirations.
Despite the recent downtrend, analysts have kept their neutral or bullish positions. The first downgrade to “sell” occurred this month, and of the 24 positions, this remains the only bearish rating. Given near-term pressure, more could follow suit.
Our recommended November 100 put has a leverage ratio of 6.1, and will double on an 13.9% fall in the underlying shares.
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