Early Action

New OIH and AAPL Trades

By Bryan Bottarelli
Monday, January 08, 2007 9:48 AM EST
Mon, 8 Jan 2007 14:48:00 GMT

Dear Bottarelli Research Member,

We have a lot happening this morning, so let’s get right into it…

First and foremost, it’s time to take an upside position in the Oil Services HOLDRs (OIH – AMEX). After the heavy sell-off that we followed closely, oil is back on the rise and it’s time to get positioned. We’ll go out into February to avoid any intra-day dips, as we don’t want to miss out on oil’s explosive upside potential.

OIH

PLAY: Buy the OIH February 140 Calls (OIH BH) at or under $3.30, good for the day. Place a protective stop loss at $1.70.

Also on the move is Apple Computer (AAPL – NASDAQ). As I’ve mentioned, Apple has an earnings announcement on January 17th — and we could see buying interest leading up to this release.

AAPL

Apple also looks to dominate this week’s technology headlines, as the International Consumer Electronics Show in Las Vegas and the Macworld Conference and Expo in San Francisco both look to get started.

Apple typically blows everyone else away at these trade shows — and this year will be no exception. Apple is se to unveil its iTV media technology — which is a mini Mac that links iTunes, iPods, and your TV to one central box. Apple’s iPhone mobile handset is also coming later this year, so I’m sure the momentum and excitement surrounding Apple’s technology pipeline will provide a nice lift for the shares. Let’s play this upside via February 90 calls. Here’s the play:

PLAY: Buy the AAPL February 90 Calls (QAA BR) at or under $4.20, good for the day. Place a protective stop loss at $2.80.

Lock and load

Sincerely,

Bryan Bottarelli
Editor, Bottarelli Research
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