Full Position Update

Watch ATPG Tomorrow

Dear Bottarelli Research Member,

The big news today is that Dell Computer (DELL – NASDAQ) is closing in on a three-year low at the same time that gold futures breached $700 for first time in 26 years. All this happened in a market where the Dow rose, the S&P ran flat, and the NASDAQ fell.

This mixed market action caused most of our positions to move down, most notably our BDK May 95 Puts (BDK QS) which hit our stop at $2.00. This is the second put play to get stopped, which continues to show the shocking upside strength of this market. As much as I’d like to be protected to the downside, we can’t ignore the market’s unwavering upside strength. That’s the primary reason why I just issued a fresh series of June upside calls, which I plan to hold a little longer than our recent trades.

Generally speaking, I’ve watched the news today for all our upside plays, and nothing crossing the wire for MON, OATS, ATPG, LMT, CX, or CHL has brought up any reason for alarm. For this reason, I continue to rate each play as a hold. In fact, if you haven’t gotten in on any of these plays, now would be an ideal time to hop on board.

The most pressing news today comes from ATP Oil & Gas (ATPG – NASDAQ) which has an earnings call scheduled to begin tomorrow at 11:00 am Eastern time. From what I’m hearing, ATPG will come out and meet their earnings guidance – and then guide higher for the remainder of the year. As I’ve been saying all along, Wall Street places 90% of their emphasis on raised guidance, so I’m hoping that ATPG comes through for us tomorrow. Hold your ATPG June 45 Calls (HKU FI) while maintaining your $2.70 stop. If we witness a run-up in the stock leading up to the announcement, I may issue the standard “sell half” protective play.

The most disturbing news today is what 100 environmental activists from Greenpeace tried to do to Monsanto (MON – NYSE). Apparently, these activists stormed one of MON’s factories in southwest France aiming to destroy any genetically modified seeds. Although no damage was caused, Arnaud Apoteker, head of Greenpeace’s anti-GMO division told Reuters “We know Monsanto produces genetically modified seeds – we wanted to find them and make them unusable."

As I mentioned when we opened this play, Monsanto constantly faces the challenge of combating the news flow caused by these idiot extremists from Greenpeace. Nevertheless, the stock usually recovers and continues its up-trend. That’s exactly the case today. Hold your MON July 85 Calls (MON GQ).

In terms of China Mobile (CHL – NYSE), they should get a nice lift thanks to BlackBerry maker Reseaerch in Motion (RIMM – NASDAQ). RIMM has learned that Europe is quickly becoming the company’s second-largest region after North America. This is a very positive sign since RIMM will soon launch their BlackBerry in China – and China Mobile expects to get most of this business by the end of this month. If you have yet to enter the CHL June 30 Calls (CHL FF), they look like a great buy at current levels.

Also, the news out of Lockheed Martin (LHM – NYSE) continues to be bullish. Just today, they were awarded a $22 million, 48-month contract to develop the Generalized Integrated Learning Architecture (GILA), which is a program aimed to help U.S. Air Force planners control air space over battlefields. Also, news floating around the Beltway is that the U.S. House is likely to approve an extra $1.4 billion this week to buy 20 F-22 fighter jets I spoke about yesterday. Hold your LMT June 70 Calls (LMT FN).

In terms of Cemex (CX – NYSE), there’s really no news – or noting technical – that changes my forward-looking view of the stock. Hold your CX June 70 Calls (CX FN). In that same boat is Wild Oats (OATS – NASDAQ), which just reported net income of $2.9 million compared to a loss of $1.2 million for the same period last year. On the news, OATS jumped – but has since run flat. With news like that, especially news that was supported the same day with a great earnings report from Whole Foods (WFMI – NASDAQ), I’d expect to see further upside for OATS. Hold your OATS July 17.5 Calls (QOQ GW)

Over on the put side, eBay (EBAY – NASDAQ) put together a little $0.54 up-stroke today which lowered your EBAY June 32.5 Puts (XBA RZ) down to $1.70. If you have yet to enter this position, I’d recommend that you give yourself some much-needed downside exposure by buying these puts anywhere under $1.90, good for the day tomorrow.

In terms of super-speculative plays that I’m watching, I’m hearing a lot of whispers about Apex Silver Mines (SIL – AMEX). If you recall, I noted that I had been watching SIL for a potential play – but then the stock took a massive one-day hit that brought the stock down the mid-teens. As you can see by the chart, the stock is now establishing a support point which could be the basis for an up-stroke.

The sell-off was due to concerns that SIL’s mines will be nationalized in Bolivia – but now it looks like those concerns may have been overblown. Keep an eye on this one for an undervalued steal.

Another big-mover today was Air Methods (AIRM – NASDAQ), the emergency transportation and medical services company that I profiled last month.

As you can see from the chart, the stock fell a whopping $5.88 today, making it one of the NASDAQ’s biggest losers, when it reported a net income of $2.6 million versus a prior-year loss of $468,000. From my eye, this was a classic case of “sell on the news” that simply got overblown. Similar to SIL, we could have a snap-back opportunity to pick up some cheap calls. As always, I’ll be watching it all.

Lock and load,

Sincerely,