May 25, 2018 - MDT Alert (BERY)

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.

Today I would like to make a suggestion on a stock that is really oversold.

That stock is Berry Plastics Group Inc. (BERY).  BERY peaked out at over $61 per share back in January.

And last week, it hit a low of $47.30.

It also traded under the lower band on the daily chart and is now just above it.

I am going to suggest a trade structure similar to the APA alert.  And that is an
uneven strangle.

Here is the suggestion:

Buy to Open September $50 call for $2.70

Buy to Open September $47.50 put for $1.50

Based on the $100,000 portfolio, I suggest a 6 lot on the callside and a 3 lot on the putside.

Based on the suggested trade size, the total invested is just over $2,000 or about 2% of the nominal portfolio.

The September strike gives us about three months to see if the stock can move higher.

As a reminder, markets are closed this coming Monday.

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