007. PIGGISH PLAY - Short Nutrien (NTR)Nutrien? What in the devil is Nutrien?
Well, I'll tell you what it isn't - 1) a good name for a company 2) a profitable company 3) a stock chart with room for interpretation and 4) in massive trouble come Monday.
Nutrien is one of the few agricultural chemical companies that have a high enough price to short using Put options. Now that is pathetic. Even better, NTR (can't say the full name anymore without laughing), is so primed for a move down that I almost feel weird for painting the chart with technical analysis to support the trade idea.
The market will very likely continue downward on Monday or at the very least will be battling sideways. A purely green day seems out of the question unless something miraculous happens between now and Sunday evening. Still, even a green Monday wouldn't prevent me from shorting this nutrient-deficient excuse for a nutrient company.
This play is a quick flip for me, because I will be using short term puts expiring July 2nd with a strike of 31.00 dollars and do not plan on hedging with stock or offsetting calls above 33.00 dollars. The trade is simple enough - if it gaps down to ~30.50 Monday pre-market, watch how it behaves around the critical area. If it struggles to bounce initially, then we are headed for the land of honey down south without much issue. You can pretty much go ahead and enter the short (don't care how you do it) as soon as the line breaks for the first time.
If it is the case that there is simply no volume pre-market, then it is best to short it on the open above 32.94. But, be careful - do not enter an uncovered short position if your timing is even slightly off. The chart is oriented in such a way where you can get pretty screwed without a strict limit order in place before the open. If you miss the optimal entry, simply wait for the 30.50 area to break. The last thing you want it is to end up chasing this slightly and getting caught in a sideways channel as a result of a lack of short interest.
But that's basically it as far as challenges here. Catch the entry and sell 3/4s for a healthy profit. Then, I don't see why you can't just leave the last quarter position alone to freefall and focus on other plays without concern over a loss.
If the market's a bear, I won't fight it. Rather, I will roll the profits from this trade into a discounted long from some other prior piggish play.
Good luck and please refrain from using this company's full name out loud. It's embarrassing.
-The Pig's Pig
NYSE:NTR TSX:NTR SPCFD:SPX
