WFMI and ADM Bounce!

Take Profits!

By Bryan Bottarelli
Wednesday, November 08, 2006 10:02 AM EST
Wed, 8 Nov 2006 15:02:00 GMT

Dear Bottarelli Research Member,

All things considered, it was a sweeping victory for the Democrats, as they took control of the House after 12 years of GOP rule. What’s still up for grabs is the Senate, which currently stands split at 49-49, and it’ll be decided by the two tight races in Montana and Virginia. As a result of this uncertainty, the markets are opening lower on the day, but have already come off their morning lows.

As expected, the Democratic majority has been a bearish catalyst for the Big Pharma sector, as names like Johnson & Johnson, Merck, and Pfizer are down 1%, 3.4%, and 2% respectively. What’s interesting is that the BBH also opened lower, but has quickly recovered as Wall Street is now beginning to separate Big Pharma stocks for biotech stocks (as opposed to lumping them all together in the “healthcare” sector). As a result of this, I’d like to maintain the BBH December 195 Calls (BBH LS) a little longer and see if we witness a further recovery.

In the meantime, let’s take some profits off the table on two of our “turnaround” positions, specifically in Whole Foods (WFMI – NASDAQ) and Archer-Daniels-Midland (ADM – NYSE).

Starting with WFMI,the January 45 Calls (FMQ AI) that you entered for $4.30 have traded as high as $5.40 today, good for a 25.58% gain since November 3rd. Let’s use today’s up-tick to take our profits off the table, as we can always re-enter this longer-term trade on any further weakness.

WFMI

PLAY: Sell the WFMI, the January 45 Calls (FMQ AI) at or above $5.20, good for the day.

Next up, the ADM January 35 Calls (ADM AG) that we entered on Monday for $1.55 have traded as high as $1.95 today, good for another 25.8% gainer. Let’s adopt the same strategy as WFMI and take our profits off the table now — and look to re-enter the position on any upcoming weakness.

ADM

PLAY: Sell the ADM January 35 Calls (ADM AG) at or above $1.85, good for the day.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From November 2006