New Pre-Thanksgiving Plays

SCHW, NDAQ, GS Plus AGN PCU, PVX & SUN

Dear Bottarelli Research Member,

As you continue to monitor the upside moves on our PCU January 52.5 Calls (PCU AX), I’d like you to make sure that you lock in your gains on today’s upside action. If that means taking a price of $3.30 or $3.50, then go ahead and lock in the gains. With the recent volatility in the metals sector, I don’t want to risk our profits by trying to squeak out an extra $0.10 on a sell price.

Also triggering this morning was the $1.25 sell price on your PVX March 10 Calls (PVX CB).If you recall, last week I instructed you to place this $1.25 sell price and leave the order open, with the hopes of getting filled at the open of trading this week. As it turns out, these $1.25 sell prices did in fact trigger, locking a gain between 19% and 31% depending on your entry price.

Now I’d like to follow up on what I said earlier today about some interesting developments that are leading to new trading opportunities.

First up is Charles Schwab (SCHW – NASDAQ).

According to my due-diligence, there is a high degree of liquidity still sitting on the sidelines, as retail investors wait to buy into the markets. But as the Dow and S&P continue to set new highs, I feel we’ll witness more and more retail buying interest, which should act as a bullish catalyst for established brokers like SCHW. As a longer-term play, lets’ get positioned to the upside in SCHW using the January 17.5 Calls.

PLAY: Buy the Charles Schwab January 17.5 Calls (SHQ AW) at or under $1.90, good for the day. Place a protective stop loss at $1.20.

Playing alongside the same thesis, we have NASDAQ Stock Market (NDAQ – NASDAQ).Although it’s been completely overshadowed by other names like the $500-a-share Chicago Mercantile Exchange (CME – NYSE) or the new $135-a-share NYMEX (NMX – NYSE) IPO, NDAQ should get a lift as more and more retail investors flock back into the tech-heavy NASDAQ. In fact, if we see heavy portfolio positioning for 2007, NDAQ could witness a very nice jump over the next few months.

Add into the equation the speculation of acquiring the London Stock Exchange (which would create the world’s largest equity market by listings, with more than 6,400 quoted companies and a total market capitalization of $11.3 trillion) and I think we should add NDAQ calls to our ledger.

PLAY: Buy the NDAQ January 40 Calls (NQD AH) at or under $1.60, good for the day. Place a protective stop loss at $0.85.

Also moving up at a strong clip is Goldman Sachs Group (GS – NYSE).If you recall, I predicted that GS would make an upside push to $200 a share before the calendar turns to 2007. As I write, GS has just hit a new 52-week high at $198.11, which means that my $200 prediction could easily come into play. Therefore, let’s make a speculative play and buy some upside GS calls.

PLAY: Buy the GS December 200 Calls (GPY LT) at or under $5.20, good for the day. Place a protective stop loss at $3.20.

I also mentioned silicone breast maker Allergan (AGN – NYSE) this morning, after they received FDA approval over the weekend for silicone-gel breast implants for cosmetic purposes. But right now, I think the stock is popping too much for us to make a play, so let’s continue to monitor it for any opportunities going forward.

Looking at our SUN January 70 Calls (SUN AN), the continued weakness in the oil sector has stopped this position out. I maintain my position that SUN is the must under-valued oil refiner, as its stock performance has not nearly been as strong as Marathon Oil (MRO – NYSE) and others.

In fact, we may have a prime opportunity to use the recent oil weakness to add some longer-dated calls to our ledger at depressed levels. When the time is right, you’ll be the first to know. Until then…

Lock and load!

Sincerely,