Take Profits!

$139 Million Contracts Fuels DRS

By Bryan Bottarelli
Tuesday, March 21, 2006 12:46 PM EST
Tue, 21 Mar 2006 17:46:00 GMT

PLAY: Sell your DRS April 50 Calls (DRS DJ) at or above $6.80, good for the day.

Dear Bottarelli Research Member,

As I expected, DRS Technologies (DRS — NYSE) continues to move higher. Today, the stock is officially “in play” on the news that the company has just been awarded a $139 million deal to upgrade the subsystems of the U.S. Army’s Bradley A3 vehicles, an armed vehicle soldiers use in close-combat fighting in Iraq.

As I write, the stock has hit a new 52-week high of $56.60. This is pushing the DRS April 50 Calls (DRS DJ) you bought for $5.60 up to $6.80.

DRS

This up-move is approaching the “busy man” sell target I set at $6.90 per contract. Taking profits at or above $6.90 would give you a 23% gain on the play. Let’s be safe and take the $6.80 now!

I say we take it!

PLAY: Sell your DRS April 50 Calls (DRS DJ) at or above $6.80, good for the day.

Also moving higher is your “indirect housing play” on Scotts Miracle-Gro (SMG – NYSE). The SMG June 45 Calls (SMG FI) you bought for $3.20 have traded as high as $3.70 today, good for a 2-day gain of 15%. If you were not able to enter these calls, I rate them a good buy on dips at or under $3.20 per contract. Like I mentioned yesterday, I’d like to pre-program a “busy man” sell at $4.50.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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