“Ian, thanks for the service. Sorry you broke your wrist. Speedy recovery. Can I get your thoughts on Mattel? What’s the best way to trade it here?”
Thanks for the kind words.
Mattel is a bit of a mess at the moment. Its CEO just stepped down, as the company struggles. Earnings could be a disaster this week. Fundamentally, it’s a walking disaster. Technically, it’s overdue for a bounce with over-extended, oversold reads on MFI, RSI and MACD.
The best way to trade MAT is with a hedge.
We can look to profit from any near-term weakness not priced in with a put… and we can trade a long-term recovery with a call. This is Mattel. It’s not going out of business. It’s simply falling on bad times that I don’t expect to last.
Consider buying to open the following trades.
Buy to open the MAT July 2015 27 call up to $2.50…
Buy to open the MAT March 2015 27 put up to $2.05.
Ian L. Cooper
Inside Value Trader