Down with Under Armour (UA)

I was screening and watching Under Armour (UA) in early 2006 for MSW but the stock never materialized into what I thought it could be.

I love their products and always wear their gear when playing flag football in the fall and rafting the rapids in the spring. However, this has never translated into a profit for me as I just don’t trust this stock.

Yes, it has been trending higher on a very slight angle over the past two years but it never worked out to be that homerun retail stock. I was thinking another Coach (COH) and I was thinking wrong.

I just don’t buy into the stock, even with a solid earnings release and a strong gap-up on the charts.

So what should I do?

Well. I followed my discretionary gut feeling and pounced on August put options this afternoon. I bought high this morning and lowered my cost basis this afternoon. Look for $1.15 to $1.50 in my trades. My target: $60 strike price.

Why? I am looking for the gap to fill after the earnings release. If the stock holds strong, I will roll them over to next month (if that’s the correct option terminology). The gap should fill; now I just need to nail the time frame and grab some profits. Maybe it won’t work but I tried.

On another note, the AUG $140 puts for AAPL were trading at $2.55 last week and reached an intraday high of $13.40 today. It’s too bad I chickened out and never purchased them. I could have gotten out above $12 per contract for a 375% gain in one week. The Apple (AAPL) freaks scared me so I passed.

This is why discretionary can be costly!