Take PEP Profits

Book A Modest Gainer

By Bryan Bottarelli
Monday, July 10, 2006 10:30 AM EST
Mon, 10 Jul 2006 15:30:00 GMT

PLAY: Sell your PEP October 60 Calls (PEP JL) at or above $2.70, good for the day.

Dear Bottarelli Research Member,

This Thursday, PEP is set to announce their Q2 earnings — and the early indication is that they’re expected to earn $0.77 compared to $0.70 this time last year. If you recall, we’re holding the PEP October 60 Calls (PEP JL) for an average price of $2.45. As I write, these calls have traded as high as $2.75, a modest 12% gainer.

PEP

Although that’s not a huge gain, I’ve been growing impatient with PEP’s ability to extend its uptrend. Today, the stock is jumping and I don’t want to miss it. That’s why I think the safe play is to take our profits off the table today.

Of course, PEP could rally on Thursday on a good earnings announcement, but the odds of the stock rallying are truly 50/50. I can’t stop you from holding the October 60 Calls (PEP JL) until Thursday’s announcement, but I think the safe play here is to take your profits off the table.

PLAY: SELL PEP OCTOBER 60 CALLS (PEP JL) AT OR ABOVE $2.70, GOOD FOR THE DAY.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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