It is Pi Day, or Pie Day, if you prefer. And what better way to celebrate than with a fresh made pie like the one below. Not only does Smuckers (NYSE:SJM) have all the ingredients you need to make a pie, from the flour and shortening to make the crust, to the fillings, but they also have a great looking stock chart.
The longer term chart is great, up over 430% since the March 2009 low. The chart below shows the latest trend higher from a pullback and bottom in August. Rising nearly 25% since then, it has paused in a consolidation since the beginning of February. You can see 3 of these consolidations in the latest move up. Each time the jump started after a touch at the 100 day SMA. The MACD has also reset into negative territory ahead of each move up. You can wait for a pullback to 122.5 for an entry. But there are other recipes to use as well.
First understand that it does not have to pullback. If the price moves over 130 it could just start moving higher without the prior resets happening again. You could also buy the stock today and add an April 130/120 put spread/ July 270 covered call collar. Buying the put spread and selling the covered call protects for a possible pullback over the next month, and the collar generates a credit putting it on. A third recipe would be to sell April 125 puts. This would generate a credit as well, and give an entry into the stock at about 123.70 if the puts are in the money at expiry.
Which recipe do you like?
Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the blog, please see my Disclaimer page for my full disclaimer.