Yesterday, the price was bouncing near $39, today it stopped near $40, resistance still seems to be holding with lots of selling above $39... meanwhile another 1,733 October $40 call options were traded representing proxies to purchase up to 173,300 shares of ZOES any time between now and October 16th... This is the second day in a row with unusually high options activity. It will be interesting to see if the reverse head & shoulders plays out. I recently bought Zoe's to hold long but I must admit that I got really close to selling calls against half my position after it jumped up over $39.50.
Thank you Jack... Dividend, that would be nice to see, I haven't seen too many reverse head and shoulders and been able to spot the pattern before the fact. I'm guessing that earnings must post in early October (first two weeks) because all types of Oct 16, 2015 (both call & put) options are fairly active.
Sorry for posting so much today... The weird volume before during and after dividends sell caught my interest. Now it appears that volume is holding strong and there's been aggressive buying in the $40 strike price. Both October and December $40's look incredibly high for this slow mover (1387 Oct 40 calls, 622 Dec 40 calls). For anyone who doesn't follow calls, each call is a proxy to buy 100 shares of stock. Prior to today there were only 417 of the October call option outstanding. Today 1387 of these options traded hands; representing proxies to buy up to 138700 shares of stock at $40 each in October. Some of the buyers paid up to $1.35 for their proxies (probably while the share price was approaching $39). This sort of activity is fairly unusual for Zoe's and worth keeping an eye on.
You know what they say... Price follows volume... Speaking of interesting volume; today there's been a large run in October $40 calls and a smaller run in November $40 calls. Dividend, if you really want to collect a few dividends here then you might try selling some higher price calls against your positions...
Do you know that at one point today the price was nearly $39? There's clearly a bit of selling pressure once the price reaches a number of resistance point yet the short term price trend has been up. Short or long, it's worth keeping an eye on.
Sorry about the bragging comment; I've seen way too much bs on yahoo boards over the years. You made a good trade but it would be interesting to know what sparked it for everyone else. The volume for both the buy side and the sell side was pretty interesting during the last hour and a half. Buyers were jumping in but selling took off once it hit your price target.
I usually don't like it when someone brags about a trade because it can be rather difficult to verify their transaction, yet I admit that a few days ago you stated that....... My trading around my core position in ZOES doesn't have much to do with charts. Its about my valuations. I put ZOES valuation at around $36. Anything meaningfully below that is worth buying, and when it gets above that, I take some off...... Good move and congrats on catching an up day.
Going back to this subject for a minute... Why do they have locations in Arizona? Looking at their map of locations; Arizona is landlocked and not very close to their other locations. If the supply chain is the real issue then Arizona is a mistake; they should be looking at states that have lots of ports (like Washington and California). I think the problem is that they are targeting a certain type of person and their targeting is too limited. It is well know that engineers have a large amount of disposable income and they like to eat out. They really should figure out their supply chain problems then target areas like Seattle, WA and Santa Clara, CA... These are good areas to get ones foot in the door and would provide good bases for growth throughout the west.
And yes I find it funny that an article released today would have several references to June rating...
Here's what's up today: A number of equities research analysts have issued reports on ZOE'S shares. They raised their price target on shares of Zoe's Kitchen from $45.00 to $52.00. The also gave the company a “buy” rating in a research note on Friday, June 19th... This is from news that was released today
Thanks for the reply and the explanation. I don’t plan on lurking here so I won’t be putting anyone on ignore; it’s always nice to see both sides of a coin even if one has a few blemishes. Your idea of buying in the low 30’s and selling at $38 is an interesting one even though the chart doesn’t seem to support it… I’d probably scale that back to $30 (and change) and sell at $35. Another way to play a similar game (and collect dividend-like dollars) would be to sell call options against your shares when the price is high and buy those back when the price is low. It will be interesting to watch Zoe’s grow yet I am disappointed that they aren’t already in California… The cities of San Jose, Cupertino, Mountain View and Santa Clara have some of the highest levels of disposable income in North America. They are full of engineers of all types and most engineers like to eat out for lunch. This is a area that Zoe’s could truly take off in; unfortunately, they will probably target San Francisco and LA before entering the valley. IMHO, the slow crawl from the east is a red flag and needs to be watched closely. It will be interesting to watch over the next 10 years to see if I’m wrong. By the way, do you have any knowledge of how Chipotle grew in the early years?
Hmm, I haven't read many of his posts but it appears that he has invested in Zoe's and believe it to be a growth stock with good potential. If you're long on the stock then I wouldn't trash him too much; he seems to be on your side. His description of their growth strategy seems accurate even though I think it's highly flawed because they should be growing on at least two major fronts. California is a huge opportunity for them; in fact, it might even be worth chasing a secondary in order to advance growth in the west. If I were them I'd start with both San Jose and Seattle; personally I'd like to see one in Fremont (one of the most diverse cities in the US and home of Tesla Automobile)... Zoe's has the potential to be the next Chipotle if they handle the growth strategy right; otherwise, they could follow the path of Krispy Kreme (2005 - 2012 weren't exactly the best years for KKD).
That's rather small thinking. Sorry, but when you target a large country like the US it is fine to take it on from two fronts. There are plenty of ports along the California coast so Zoe's should be able to figure it out. Building a supply chain to push products from Florida to California seems rather backwards. Honestly if the folks working at Blaze Pizza and The Habit can figure it out then the folks at Zoe's ought to be able to too... Their map makes it look like they are a little scared of the west; that's too bad because the state of California could be one of their biggest opportunities.
I was just looking at their location map and discovered that they are almost entirely an east coast company, but California is the second melting pot of the United States so why not go West???