A First-Pumping Open

GIS & CSCO Up, JOE Down

By Bryan Bottarelli
Thursday, September 21, 2006 12:00 AM CT

Dear Bottarelli Research Member,

I was pumping my firsts in the air this morning as General Mills (GIS – NYSE) said their fiscal first-quarter income rose past Wall Street’s expectations. They also reaffirmed their 2007 earnings outlook, which is something investors love to hear. On the news, GIS is making a strong upside push to a new 52-week high at $54.80. Just look at this wonderful stock chart:

GIS

Based on today’s move, I still think GIS will be a $60 stock my Christmas. But let’s try to use today’s big pop to take profits on our GIS January 60 Calls (GIS AL). We entered these calls for a combined entry price of $0.38 and they’ve traded as high as $0.45 today. Considering they were down around $0.25 yesterday, that’s a nice upside move for a 3-month out-of-the-money call. If these calls trade at or above $0.50 today, let’s take the 31.57% profit.

PLAY: Sell your GIS January 60 Calls (GIS AL) if these calls trade at or above $0.50, good for the day.

That wasn’t the only news item that induced fist pumping this morning. Another wonderful news item came thanks to Piper Jaffray, who upgraded networking-gear provider Cisco Systems (CSCO – NASDAQ) to outperform — noting that the company will benefit from ongoing network investments in high-definition television and mobile and Internet video.

CSCO

On the news, Cisco hit a new 52-week high of $23.7 and your CSCO November 20 Calls (CYQ KD) have traded as high as $3.80. That’s a solid 18.75% gain from your $3.20 entry price earlier this week. A $4.00 price would hand you a 25% gainer, so let’s try to get filled on that price tick in today’s trading.

PLAY: Sell your CSCO November 20 Calls (CYQ KD) if these calls trade at or above $4.00, good for the day.

Oh, and as I review my stock ticker, I see that JOE is down and NWS is up, which his exactly what we want to see. All told, I call this one heck of a morning! Set your sell orders, and as always,

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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