What a Week!

Gear Up for More Lock and Load Action

By Bryan Bottarelli
Friday, March 31, 2006 3:02 PM EST
Fri, 31 Mar 2006 20:02:00 GMT

Dear Bottarelli Research Member,

Congrats on a successful week of trading.

From March 22nd to March 28th, we took a string of six (6) winning trades in a row, hitting 33.93% on DRS April 50 Calls, 20.51% on LLY May 60 Puts, 19.35% on the first half of our PTEN May 30 Calls, 23.08% on FRO May 35 Puts, 26.47% on ESV May 50 Calls, and a whopping 151.61% on the second half of our PTEN May 30 Calls.

Even more impressive was the timing of these trades. As I write, the winning stocks of yesterday — PTEN and ESV — are both suffering losses as a result of near-term profit-taking. Not only that, but our downside winner on FRO is actually rallying today. This means our “take profits” actions of yesterday were indeed timed perfectly. So take five seconds and pat yourself on the back for some great trading action. We couldn’t have timed it any better.

I’ve received some inquiries about the downside trade on the Eli Lilly (LLY – NYSE) May 60 Puts (LLY QL). As you recall, we entered these puts for $3.90 and I recommended taking your profits when they ticked up to $4.70. The inquiries came from a few members who were not able to get executed on that $4.70 exit price and are still holding the play. Well guess what?

LLY

Today, LLY is down another $0.73 and the puts currently trade between $4.90 and $5.00. So if you haven’t already done so, take your profits now!

After this week’s round of profit-taking, our trading ledger is currently holding three call positions: SMG June 45 Calls (SMG FI), CMED June 30 Calls (QCY FF) and our longstanding play on BDX June 60 Calls (BDX FL).

All three positions are waffling today — which means they’re down from our original entry prices. Nevertheless, I continue to retain my bullish thesis on all three — and hopefully they’ll turn tail and make a new upside run next week.

Of course, the trick now is to balance out the 3-sided call ledger with an explosive set of put options. One sector that I’ve been closely following is steel stocks — and notably Nucor Corp (NUE – NYSE).I admit, the stock has been on one heck of an upside run, going from the mid-$60 level in January 2006 up to its current levels north of $100. As much as I admire the run-up, it appears it’s time for the stock to take a breather. Just look at the candlestick formation over the last two days, and you’ll see what I mean.

NUE

To my eye, the stock can retrace all the way down to $95.00 and still find itself entrenched in a strong uptrend. So next week, a fresh round of NUE puts could be in order. Just something to chew on over the weekend. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From March 2006