Tuesday Morning Notes

FLML, OIH, ANF, and CAT

By Bryan Bottarelli
Tuesday, October 24, 2006 10:35 AM EST
Tue, 24 Oct 2006 15:35:00 GMT

Dear Bottarelli Research Member,

First the good news…

After giving back some of their gains yesterday, Flamel (FLML – NASDAQ) continues to pop in today’s early action, pushing your FLML December 20 Calls (FLU LD) back up to $5.00 to $5.20 per contract. Let’s go ahead and lock in the gains!

FLML

PLAY: Sell your FLML December 20 Calls (FLU LD) at or above $5.00, good for the day. We can always re-enter the position into December on any momentary price dips.

Also looking good is Abercrombie and Fitch (ANF – NYSE). Yesterday’s historic high was once again breached today, as ANF set a new all time high today of $79.21. I look for this momentum to continue into November and December, so hold your ANF December 80 Calls (ANF LP) for more gains.

ANF

On the flipside of the coin, your OIH November 125 Puts (OIH WE) hit my tight stop price this morning of $2.10. As I mentioned, OIH options move fast, and this was one of those situations. But remember, if Big Oil reports disappointing earnings starting tomorrow, we’ll have the opportunity to play this one again and certainly make up for today’s stop out.

OIH

Finally, I’m considering adding to our protective DIA November 120 Put (DIA WP) hedges. I’m also considering using the “downside gift gap” we witnessed in Caterpillar (CAT – NYSE) to buy some longer-dated calls. As soon as I wrap up my due diligence on each potential opportunity, you’ll be the first to know. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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