Tiffany Puts - Upcoming reflection of the global situationI bought puts on Tiffany as I felt like the stock was buoyed by the news of the LVMH acquisition bid last year. It did not seem to be hugely affected by the Covid virus and the potential upcoming economic slowdown implications.
With April's non-farm job numbers going to reflect rising unemployment numbers. Corporate and consumer debt also catching up. This perfect storm will be wrapped by the disappearance of China tourist spends on Luxury goods.
I believe Tiffany's stock price will be pushed to better reflect the current and future situation and have bought 130 ITM puts at 11.62 that will expire on 15 May 2020. Implied Volume of +32% (Seems like a good price)
Tiffany
LVMH Moët Hennessy Louis Vuitton merges with TiffanyApparently low interest rates are one of the best christmas presents of the year so far. What would you do if you could enlarge your business at almost zero cost? Withouth any doubt the vast majority of us would say yes. And thats exactly what LVMH Corporation did with Tiffany:
"LVMH Moët Hennessy Louis Vuitton SE (“LVMH”), the world’s leading luxury group and Tiffany & Co. (NYSE: TIF ) (“Tiffany”), the global luxury jeweler, today announced that the companies have entered into a definitive agreement whereby LVMH will acquire Tiffany for $135 per share in cash, in a transaction with an equity value of approximately €14.7 billion or $16.2 billion."
But the best part is that this colision will be fiannced by the issuance of bond with 1% interest rate: "Arnault told Reuters that LVMH would finance the purchase with debt, adding the group could currently pay interest of less than 1% to issue bonds."
Thats what I call a 100% deal.
What is gonna happen now? LVMH representative were scared that Hong Kong protests may affect Tiffany results... But if the agreement has been reached, things shouldn't be so bad! Worth following the value, however, it can be late to purchase...
On the other hand, for the last few years, we can see a general and sustained growth since December 2016, when the four EMA curves began rising simultaneously.
Looking at the MACD indicator and Relative Volatility Index , a short-term correction could be expected.
How to trade stocks like Tiffany & Co. using imbalancesAs mentioned in previous supply and demand technical analyses. When trading supply and demand imbalances we don’t really need any indicator or add-on tools to tell us how and when to place a trade. Let’s take a look at Tiffany % Co. stock #TIF using supply and demand imbalances as technical analysis without using a single indicator dragged on the chart, just price action and impulses.
When looking at the weekly chart, it’s clear there bearish impulses are stronger than the bullish impulses. These impulses have created a brand new weekly supply imbalance around $110 per share and reacting to it very strongly. The bias is shorts right now since bearish impulses are stronger than bullish impulses. You can used these impulses and use other trading strategies to take shorts on the way down, or even use options strategies to take long puts on the way down. See weekly chart with the weekly supply imbalance drawn around that price area.
Fears are not over for TiffanyYes, fears for TIF aren't over and this scenario will clarify better what's next... At the moment 94.58 could be a target to respect.
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Uptrend in Tiffany & CoTiffany & Company is an American luxury jewelry based on NY. I'm closely watching this chart, a linear regression r(0.944) shows a nice, systematic uptrend that started a few months ago. Be careful trading this asset since an increased security near the Trump's Tower initially led investors to consider the possibility of a sharp decrease in sales .
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"The trend is your friend." - Unknown
TIF: Good long setup, great upside to be confirmed soonTIF has a bullish reversal setup, good valuation and fundamentals and a high beta. It's a very interesting stock to own, with clear relative strength, and good potential upside. We have taken the long from 62.80 today, stop at 62.03, and aiming for prices over 64.50 in the intermediate term. Rgmov shows an uptrend is active, and the RgExp volume indicator confirms today's advance nicely. If we break the earnings key level resistance above, we migh see TIF trading close to 70 soon.
Enter longs if we break resistance, buy dips back to the 63.32 handle after moving above this zone, or enter partially at market open tomorrow if not in. You can alternatively short puts at the money for 1 month, or perhaps employ a different option strategy suitable for the current volatility levels.
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Risk disclaimer: My analysis is provided as general market commentary and does not constitute investment advice. I will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.