HOG, WDC Follow-Up

Sell HOG Calls

By Bryan Bottarelli

Friday, January 22, 2010 9:47 AM EST

Fri, 22 Jan 2010 14:47:00 GMT

PLAY: Sell your HOG February 25 Calls (HOG BR) at market, good for the day. Hold your HOG February 24 Puts (JOZ NH).

Dear Bottarelli Research Member,

Interestingly enough, the markets are telling us that both a positive report and a negative report will each push stocks lower. That’s exactly what we’re seeing today on Western Digital (WDC – NYSE) and Harley-Davidson (HOG – NYSE).

Despite reporting a sharp contrast in earnings (one great, one horrible), both HOG and WDC are trading lower this morning. This negative overtone is unmistakable. The markets are now in a dangerous spot, as I reported earlier, and we must be ready. Therefore, let’s go ahead and sell our HOG call position and ride the puts. Their bad earnings should set a negative tone for at least the next week. Let’s see if our puts can recover.

HOG

PLAY: Sell your HOG February 25 Calls (HOG BR) at market, good for the day. Hold your HOG February 24 Puts (JOZ NH).

We just might do the same for WDC, but let’s keep watching to be sure.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Editor, Bottarelli Research

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HOG, WDC Follow-Up

Sell HOG Calls

Harley-Davidson (HOG - NYSE)

HOG February 25 Calls (HOG BR)

HOG February 24 Puts (JOZ NH)

Western Digital (WDC - NYSE)