Dear Bottarelli Research Member,
Despite the market’s late-day weakness, I’m still very comfortable holding our Apple December 175 Calls (APV LO) and our JASO December 55 Calls (QJP LK). Both stocks are very strong, and each of them will benefit off any market upside over the next few trading sessions. If you have yet to enter these positions, feel free to do so now.
At the same time, I’d like to balance out the call/put ledger by adding a new December put on Precision Castparts (PCP – NYSE). As you can see from the chart, the metal component manufacture (serving the aerospace, power generation, and automotive markets) has just failed at its 200-day moving average, which could indicate that a move under the $130 level is on the near-term horizon. Let’s profit off any continued weakness by adding a December put position now. Here’s the play:
PLAY: Buy the PCP December 135 Puts (PCP XG) at or under $6.60, good for the day. Current bid/ask spread is $6.10 to $6.40. Place a protective stop limit at $3.90.Lock and load!