At the time of our recommendation, BOOT had plenty of chart support in place
Last week, subscribers to Schaeffer's Weekend Trader Alert doubled their money with our Boot Barn Holdings Inc (NYSE:BOOT) July 110 call. Below, we'll unpack the contrarian drivers we saw that made the bullish bet enticing.
At the time of our recommendation on Sunday, May 26, BOOT was trading at $113.25. The stock had pulled back to layers of support at its April high and 10-day moving average. Though BOOT had slipped after bearish guidance last month, the shares went on to have a bullish outside day reaction, and continued to recent 52-week highs, pointing to underlying technical strength. The equity also just closed above $112, which is seven times its initial public offering (IPO) price.
Short interest has been unwinding since January, and we believed it was apt to continue given the stock's strength despite the bearish guidance. Short interest still represented 12.7% of BOOT's available float and would've taken shorts over five days to cover at the stock's average pace of trading.
After our recommendation last Tuesday, the Boot Barn proceeded to rattle of six-straight wins, including a 4.2% pop on May 31. We closed the position Monday, June 3, for a 100% profit, allowing subscribers to double their money in under one trading week.
