Trade of the Day: Dean Foods (DF)

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We’ve opened a  bullish trade on Dean Foods (DF). As the S&P 500 continues to rebound off of support at 1,825, traders are continuing to turn their attention to food companies and other defensive stocks, which bodes well for Dean Foods.

Dean Foods has seen its stock price break up through resistance at $20 as it approaches its earnings announcement on Monday, Feb. 22, before the market opens. Analysts at Bernstein recently upgraded the stock from “Market Perform” to “Outperform” thanks to improving demand and margins. Demand for milk-based products has been increasing at the same time that wholesale milk prices have been dropping. This is a great combination for DF and its “Land O Lakes,” “TruMoo” and other brands.

Dean Foods isn’t going to hit any real resistance until $21.50 — a resistance level established in May 2013 — and we are seeing an increase in activity for the March 22 call options. We anticipate that the stock will continue to rise in the days ahead, ultimately challenging the highs it established in 2013 around $22.62.

‘Buy to open’ the Dean Foods March 22 Calls (DF160318C00022000) for a maximum price of $0.95.

Related, on Feb. 19, we’ll also get the latest Consumer Price Index (CPI) figures. This report is released by the Bureau of Labor Statistics, and it measures the price level of a fixed-market basket of goods and services purchased by consumers. The CPI is used to calculate cost-of-living adjustments for government programs and is the most widely cited inflation indicator.

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.


Article printed from InvestorPlace Media, https://investorplace.com/2016/02/dean-foods-df/.

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