Calls Recovering While MDC Hits $8.00?

Try Once Again to Take MDC Profits

PLAY: Sell your MDC June 65 Puts (MDC RM) at or above $8.00, good for the day.

Dear Bottarelli Research Member,

First and foremost, I’d like welcome the newest members to Bottarelli Research. I sincerely hope you’re as excited as I am, because this is going to be quite a ride.

Ok, so let’s get started. As part of this exclusive new trading group, you’ll soon be receiving e-mail alerts, just like this one, that recommend, update, and review your trades.

Our trading ledger is currently set for the week, so I won’t be recommending any new plays today or tomorrow. But starting next week, we’ll look to get positioned in a few new trades that look to make between 25% to 75% in short order.

Currently, there are four open positions in the trading ledger – two calls balanced with two puts. By balancing the stocks in up-trends (via calls) with the stocks in downtrends (via puts), you’re always in position to make money no matter what happens to the broader markets.

Having said that, I’ll quickly give you an update on each position – starting with our downside play on MDC Holdings (MDC – NYSE).

MDC is a company that builds single-family detached homes and town-homes in Virginia and Maryland. One of our Charter Members owns a homebuilding company in Virginia, and he tells me he’s never seen such a glut of unsold inventory. This is a perfect example of why MDC stock is stuck in such a serious downtrend.

We originally entered the MDC June 65 Puts (MDC RM) on February 13^th when the stock hit a new low of $59.71. As I write, the stock is trading even lower at $58.25, which has once again bumped your puts very close to our profit mark. The last trade was $7.90, so let’s once again try to use the downside to take profits.

PLAY: Sell your MDC June 65 Puts (MDC RM) at or above $8.00, good for the day.

The second downside play we’re holding is the APOL May 50 Puts (OAQ QJ). Apollo (APOL – NASDAQ) is a company that offers adult education programs through their University of Phoenix program. The company takes in about $2 billion in annual revenue but they just lowered their second quarter forecast by three cents a share due to lowered enrollment and heavy advertising spending. On that news, the stock was downgraded by Banc of America on March 1^st – and we entered put options on March 2^nd.

After entering these puts, APOL jumped on the news that one of their major competitors was being acquired, which brought speculation that perhaps APOL would be acquired as well. It’s this speculation that has lowered our puts down to current levels of $2.15. The company has an earning call scheduled for March 23^rd, and it doesn’t look to be pretty. I hope we can remain in the downside play leading up to this news. Nevertheless, maintain your $2.00 stop on the puts.

The first of our two upside plays is Moody’s May 65 Calls (MCO EM), which we entered on February 23^rd for $4.70. Moody’s is a top credit rating service in the world who research, analyze, and offer opinions on debt instruments and securities. This is a huge industry – totaling $2.5 billion – and it’s dominated by only three players: Standard & Poor’s, Moody’s, and Fitch Ratings.

We entered the upside play when Moody’s posted a 22% percent rise in net profit brought on by surging demand for finance ratings. After withstanding the market weakness over the last few days, these calls currently trade for $4.20. Hold.

And finally, we’re holding BDX June 60 Calls (BDX FL) which we entered on February 23^rd for $6.90. BDX manufactures and sells medical supplies like needles, syringes, intravenous catheters, insulin injection devices, and blood glucose monitors for the treatment of diabetes. As you know, diabetes is one of the fastest growing medical issues in the country, and BDX looks positioned to capitalize on this trend.

Much like Moody’s, BDX was a little weaker during the last few days of market downside, but it now looks to have established a support point for a new run at a 52-week high. The calls are currently trading for $5.10. Hold.

Lock and load!

Sincerely,