What Volatility!

Strong Bounce on LMT

By Bryan Bottarelli
Thursday, June 08, 2006 4:28 AM EST
Thu, 8 Jun 2006 09:28:00 GMT

Dear Bottarelli Research Member,

What an incredible day of market volatility!

More importantly, what timely protection we played on the QQQQ July 40 Puts (QQQ SN)!

At one point, the Dow was showing a 140-point loss. This pushed the QQQ July 40 Puts that you purchased for $2.00 all the way up to $2.70. This was all I needed to issue a quick “take profits” alert on these protective options. This sell advice prove dead-on target.

By the close of today’s trading, the Dow had reversed the 140 points of downside and actually closed the day UP 7.92 points. This, without question, is a moral victory for the bulls. Looking back, it looks like 2:40 EST is when the markets officially hit bottom and began to move higher. It’s going to be extremely interesting to see what tomorrow’s trading brings.

Like I mentioned in yesterday’s alert, Pepsico (PEP — NYSE) looks like one of the safest plays out there right now. Throughout today’s selling pressure, PEP remained quite strong, closing with only a $0.17 loss. The company announced today that their second-quarter earnings will be webcast live over the internet on Thursday, July 13th at 11 a.m. Hopefully we’ll see a share price run-up in anticipation of this announcement (er, webcast).

Another company showing a very strong bounce today was our old friend Lockheed Martin (LMT – NYSE). Just look at this bounce off the near-term lows:

LMT

If we get any sort of upside momentum back in the markets, you can bet that LMT will once again break above their 50-day moving average, possibly even shooting back up to the $76.00 level. As always, I’ll be watching every step of the way for a strong profit opportunity. Until then…

Lock and load,

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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