AP3 trade ideas
Large Call Rollout In APD Bets On $165+ By SeptemberAir Products and Chemicals shares have been trading in a nice uptrending channel for nearly two years. However, for those looking to buy APD it is not an ideal time right now. The stock is now near the top of the channel (RSI near highs as well) and could be setting up for a pullback to mid to high $140's in the coming weeks (major support at the 40-week SMA).
On Friday, someone rolled out 2,460 June $145 calls ($13.70 credit) into 2,460 Sep $155 calls ($9.50 debit). He/she is taking some profits on the recent 5 week rally, but still thinks APD can rise north of $165 by September options expiration. 5,010 calls traded vs the daily average of just 976 calls.
Shares trade at a P/E ratio of 21.27x (Sep16 estimates) with 12.9% EPS growth, P/S ratio of 3.21x, and a P/B ratio of 4.57x. Revenue is likely to grow in the low single digits this year and accelerate to 6%+ in FY16. Hedge fund manager, Bill Ackman, owns more than 20M shares (nearly a 10% stake) and believes the stock price could be worth more than $200 under the right management.
APD potential measured move upAPD has been in an uptrend all year but the deep pullbacks have made it too unpredictable to long-term trade so far.
On the daily chart an inverted head and shoulders chart pattern offered an opportunity to trade a measured move up. Since the break of the pivot high (which also confirmed the H&S pattern) there have been two gaps up on slightly higher volume.
This had the potential set-up for an almost $20 move up but, if you missed the first gap, the risk:reward is rapidly declining.
It offers a very good buy for a short-term trade as the momentum is up (with the gap, volume and bullish bar all in the direction of the trend).
But for longer-term traders you may want to now wait for a break above the $150 half figure before looking to trade this one.
TL Break w/ Vol. ExhaustionSee notes on chart.
3 week price change is 1.89%
PA could not form new highs all of AUG and PA is seeming to form a rounded top.
Price broke through support and and the trendline, but was pushed up by buyers today. wait on confirmation.
Buying DEC 130 Puts I think this gap will be filled before the end of the year.
APDLooks like an AB=CD just completed. Could be time for a pull back. I'll take a closer look at the weekly and daily this weekend
Trader Thinks APD can Trade $135 by Jan 2015Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide. The company operates through four segments: Merchant Gases, Tonnage Gases, Electronics and Performance Materials, and Equipment and Energy. Today a trader bought 10,000 APD Jan 2015 Calls for $4.10. Let breakdown this trade. This is a $4.1 Million Bet that APD can trade up to $135 by the End of 2015 with a Breakeven of $139.10. Anytime I see an order this large, I need to allocate some of my capital to this trade, so I just followed the trade into the same position.
The Trade: I bought the APD Jan 2015 135 Calls for $4.10
Risk: $410 per 1 lot
Reward: Unlimited
Breakeven on Expiration: $139.10
Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long
