Dear Bottarelli Research Member,
In the first half of the trading session, it looked like the decision to sell the second half of our SPY August 150 Puts (SYH TT) was a good one. After all, the Dow was up over 100 points and the S&P 500 was making a strong attempt to hold the line at the 50-day moving average (see below)
But over the last hour, the market internals have once again turned south, and this warrants us adding a new downside put to our ledger. After scanning a multitude of candidates, it appears like many of the stocks on my radar screen want to test the 50-day moving average. In fact, the names I mentioned last week (notably U.S. Steel) are in the process of doing this right now. And if that’s the case, than Fluor Corporation (FLR – NYSE) has room to fall. As you can see below, a FLR re-test of the 50-day moving average means that the worldwide engineering, construction, and maintenance firm could soon move under $100, so let’s make a quick downside play to capitalize on this move.
PLAY: Buy the FLR August 105 Puts (FLR TA) at or under $5.40, good for the day. Current bid/ask spread is $5.00 to $5.30. Place a protective stop limit at $3.40.
Lock and load