Wednesday, March 9, 2011

Acquired second lot of Bunge

As discussed in previous posts, I was looking for a pull back in Bunge to acquire a second lot. Got that chance today and acquired the second lot at $70.31.

That makes the average price for the whole position to be around $69. That also happens to be near the 50 dma. So if the price falls to this level, I will have to consider calling off this trade at no gain.

However, technically the stock bounced off of $70 nicely today. It is still has forward pe around 10, but the confusing balance sheet shows it trading under book value but with lots of debt. Not surprisingly the analyst estimates remain all over the map, and the implied volatility on BG options remain high. So if the stock advances short term, I will likely try to capitalize on this uncertainty an sell a upside call to hedge the trade.

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