Long Puts on Coca-Cola (KO)

Long Puts on Coca-Cola (KO)


  This Trade Was Closed December 20, 2011

With today’s bullish breakout not only on KO but on the stock market in general, I think it’s time to close this trade and salvage the remaining value. KO broke up above resistance at $68, and with the sideways channel the stock has been in, it doesn’t look like chances are good for the stock to move back down.

I’m closing for $0.35.

  This Trade Was Updated December 20, 2011

Even on a day when the market in general is surging higher once again, KO has failed to climb back up to the highs it saw yesterday, and it is already starting to pull back. I still like this trade.

Original Trade Post:

Coca-Cola (KO) is under pressure today as it faces allegations that tainted Coke killed a child in China. However, I think KO is facing tougher technical issues.

KO is facing strong resistance at $68, and if the past is any predictor of the future, the stock is on its way back down to support at $64.

In fact, if you look at the stock’s recent high in September, you can see the potential makings of a head-and-shoulders pattern. I’m looking for a drop back down to the neckline.

Trade Details

  • The Ticker:     KO
  • The Trade
  • Buy to Open Jan 2012 65 Puts at 1.18 or better
  • Trade Opened: December 2, 2011
  • Trade Modified: December 20, 2011
  • Trade Closed: December 20, 2011

Chart courtesy Finviz. Click to open larger.

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