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Trade of the Day: Krispy Kreme Doughnuts (KKD)

Try Krispy Kreme for a sweet options trade

   

Krispy Kreme (KKD), a stock we’ve traded options on before, is lighting up again on my Power Options scanner. Its showing what I call a “reestablished buy” pattern in which the stock has come back from a temporary downtrend to rally again.

8 23 13 kkd Trade of the Day: Krispy Kreme Doughnuts (KKD)

Since the last time we traded KKD, it’s up 7%, and it looks like it has even more room to run in the short term. Long-term prospects are bullish as well, and the stock shows support at $20.

Recommendation: Buy KKD Oct 24 call options at $1.10 or lower. After entry, take profits if the stock price hits $25 or the option price reaches $2.40. Exit if the stock price closes below $21.40 or the option price falls to 70 cents.

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