Close APKT

Plus, Watch NFLX

By Bryan Bottarelli
Tuesday, March 08, 2011 9:58 AM EST
Tue, 8 Mar 2011 14:58:00 GMT

PLAY: Sell your APKT March 75 Puts (O:APKT 11O75.00) at market, good for the day.

Dear Bottarelli Research Member,

As we discussed yesterday, if the Dow and S&P 500 break below their critical support points, we could see heavy selling pressure. But at the same time, we could also see a bounce at these levels. Therefore, we have to be quite nimble with our trading until we see which way the markets are headed.

INDU

In that spirit, let’s use this morning’s reversal on APKT to close out our March 75 Puts (O:APKT 11O75.00). While this isn’t a home-run winner, it does represent safe trading here in this hornet’s nest of a market. Close your puts, and then we’ll evaluate the market’s strength and/or weakness for our next maneuver.

APKT

PLAY: Sell your APKT March 75 Puts (O:APKT 11O75.00) at market, good for the day.

In other news, Netflix (NFLX – NASDAQ) is falling below its 50-day moving average on the news that Facebook and Warner Brothers have inked a new streaming movie deal. From what I can tell, the millions of Facebook users can now rent movies using “Facebook credits” and then stream the movies from the so-called “movie fan page.” This added competition for NFLX comes on top of what we’ve already heard about with Amazon.com and Coinstar. We all knew that NFLX could not keep up their insane valuation forever, and now, this could indicate that the wheels are starting to come off. If NFLX bounces today (which it always seems to do), this might lead to a nice spot to grab some puts. More to come.

NFLX

But until then…

Lock and load!

Sincerely,

Bryan Bottarelli
Editor, Bottarelli Research
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