Well, my 100% gains in Abercrombie & Fitch (ANF) puts are about to become over 200% gains.
Long-time readers know that for many weeks, I’ve been hyping the oversexualized ANF as a great short, since it has historically fallen hard from its overvalued prices to the depths of Sumerian darkness. In recent months, my x-ray vision spotted a descending channel that I’ve never seen mentioned anywhere else.
The stock had been eroding for a while, creating the aforementioned triple-digit gains, and I sold off 40% of my position about a week ago. As for the remaining 60%, the earnings announcement this morning is just what the doctor (actually a sex addiction therapist) ordered.
Here is the channel and a rough illustration of what prices will be doing at the opening bell. I suspect I’ll be saying thank-you-very-much to these puts soon after the opening bell.
It seriously is a very weird company. They sell wildly overpriced clothes while pushing their young-people-boinking-constantly images to their impressionable patrons. They’re only outdone by the completely bizarre, virtually pedophilic, store known as Pink, which is essentially a Victoria’s Secret for the prepubescent crowd, but that’s another story altogether.
