Rocky Mountain Chocolate Factory — 300–500% Target

I see huge recovery potential in Rocky Mountain Chocolate Factory.

The entire idea is based on my sugar analysis, which is already published on my profile. There I explained why I anticipate a decline in the price of sugar.

de.tradingview.com/chart/SB1!/byp9lGJx/

My idea is simple

I expect a drop in sugar and am looking for the potential opposite move in RMCF. For me, this is a pure divergence trade based on seasonal patterns. The seasonal window comes from my sugar analysis; the following chart shows the historical comparison with RMCF.

Sugar analysis

The stock is on top, sugar below. In the marked historical periods, we repeatedly see falling sugar prices and a recovery in RMCF. That is exactly the opposing movement I want to trade again.

Revenue figures and current company developments do not interest me for this trade. My focus is on the seasonal window and the relationship between the commodity and the stock.

A possible tailwind for margins

Sugar is part of the company's raw material costs. If lower sugar prices also feed through into purchasing, this can reduce costs and ease pressure on margins. For me, that is an additional positive for this idea.

The scenario outlined in the chart offers roughly 500% upside potential. That is why I find RMCF so interesting in combination with my sugar thesis.

My thinking remains simple: weaker sugar, RMCF with recovery potential. That is precisely the divergence I am betting on.