Thread: Coffee stock pair

I'd written extensively on DDRX after researching the stock history for some time. The public origin of this company, an IPO with a somewhat infamous LA based "chop shop," The Boston Group, LP and the past and present deals of Chairman Paul Heeschen made me "suspect," at best.

Needless to say, DDRX on a stand alone, didn't get a chance to unwind, due to it being acquired by PEET, however, the perils that lie ahead for DDRX have now become added fuel for a stock in PEET that was already ripe for fading. Conversely, there's a few names in the space that offer value buyers a nice entry, here's my pair;

Time: 3 - 6 months

SELL / SHORT: PEET between $41 - $45
Stops: Pro rata to entry, $46 - $50
Target 1: Break of $37.28
Target 2: Break of $35.00
Target 3: Break of $28.00

BUY / LONG: CBOU between $7.15 - $7.50
Stops: Pro rata to entry, $6.30 - $6.55
Target 1: Break of $8.90
Target 2: Break of $9.90
Target 3: Break of $11.25

A year end update for the mid - November "coffee pair post."

- We've covered 2/3 of the PEET short position at the noted target and intend to hold the final third to the noted target.

- We've sold 1/3 of the CBOU long position at the noted first target and will likely take off the remaining 2/3 at $9.90, vacating target 3 noted in the initial post.

Simply put, there's better places to play than in these names but this trade was a winner all the same.