Our put position Kroger (KR) continued to drop as the stock moved higher, explains Linda McDonough, editor of the specialized trading service, Investing Daily's Profit Catalyst Alert.

News of Jana Partners taking a large position in Whole Foods (WFM) lifted the entire grocery group. Traders speculated that Jana would enlist Kroger or privately held Albertson’s as a partner to revamp Whole Foods.

Based on Jana’s history, I find this unlikely as the private equity firm typically uses its robust internal team to devise turnaround plans.

I think the put trade is still a good one and would suggest anyone looking for a new option trade to buy these July 27.5 puts which are trading about 60c versus my $1.03 entry point.

Bullish speculation should be replaced with disappointment in sales and profit trends when Kroger announces earnings on June 15.

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