Targeting a Quick Profit

Almost Ready to Sell Your OIH Puts

By Bryan Bottarelli
Wednesday, August 30, 2006 3:57 PM EST
Wed, 30 Aug 2006 20:57:00 GMT

Dear Bottarelli Research Member,

Shortly after we entered the OIH September 135 Puts (OIH UG) this morning for $3.70, they traded as high as $4.30. I got the inclination to take the quick profit, but before I could even get a “sell” alert out the door, the puts slowly began to creep back down in price. Even if I had shot the sell alert out the door, prices would’ve moved too quickly to trigger a sell price, which isn’t’ necessarily a bad thing. Looking at the chart, the OIH could easily move down to $130 before competing the next phase in its down-cycle.

OIH

As I mentioned this morning, the entire sector fell hard today, clobbered by the combination of a bearish U.S. crude oil inventory report and the recent price run-ups in anticipation of tropical storms. Based on the muted trading activity we’ve witnessed this week, I’d like to take profits on this trade as quickly as possible. So consider this a standing order:

PLAY: Sell the OIH September 135 Puts (OIH UG) at or above $4.20, good for the week.

In other news, AIRM has finally decided to wake up and rally. Although our September 25 Calls (UDU IE) we closed yesterday,anyone still holding them is happy today, as the stock traded $1.26 higher in today’s action. Like I mentioned, AIRM is a stock that can move up quick on any momentum, and it could be getting that momentum today (albeit a day late for our model portfolio). Nevertheless, if you’re still in the calls, I’d look to sell them at or above $1.00, good for the week.

AIRM

Also, continue to hold your WFC October 35 Puts (WFC VG), as the stock simply must roll over and die sometime in the near future. Hopefully this death comes before the end of the week!

WFC

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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