Meta-Trader - A Story of Spam

Welcome back Meta-Traders.

Sometimes trades come from strangest places. A case in point is a trade closed this past week in food products company Hormel. Hormel is best known for Spam, which is canned meat product made of pork that comes out of the can in a "gelatinous glaze". After the classic Monty Python spam sketch in the 1970's spam became both a noun and a verb referring to all the useless extra junk on the Internet.  So what does this have to with with trading?

Well back on 1/18/2013 this stock showed up on my new all-time-high scan.  It had already had a pretty good run up, but since then hardly a down day.  As it cleared the recent top, I picked up 100 shares at about $35.80 (first purple bar).  It ran up immediately, then pulled back and I was briefly in the red on the position.  But soon after, it broke out and headed steadily higher.  I picked up another 100 shares (second purple bar) on Feb 22 and a final 200 shares at the final purple bar shown on the chart on March 7th.

At this point I was "fully loaded" in the stock and felt that I was pushing my luck on the last 200 shares and didn't want to press my luck.  So I closed all 400 shares at about $39.21.  I don't think the stock is finished going up in fact I am eyeing the April 40 calls at about 45 cents.  If Hormel breaks the $40 mark, it could move significantly higher and those April 40 calls could be a great trade.

I can't find any news to explain the price action.  I think is a potential takeover candidate since Warren Buffett's Berkshire Hathaway recently bought Heinz ketchup.  I don't have any other information to offer. In this case, we'll let the stock do the talking.

Enjoy your weekend, spend some time and money with your loved ones.