Two New Trades

Playing PCU and BOT Higher

By Bryan Bottarelli
Wednesday, November 29, 2006 10:35 AM EST
Wed, 29 Nov 2006 15:35:00 GMT

Dear Bottarelli Research Member,

I have two new trades ready for immediate release — one is a little more conservative and one is a little more speculative. We’ll start with the conservative play, which comes in the form of Southern Copper (PCU – NYSE).

PCU

As you know, Southern Copper has been a name we’ve played with great success in the past. They’re undoubtedly the best all-around metals play, with productions in copper, molybdenum, zinc, silver, gold, and lead. Looking at the chart, PCU looks to be on it way to breaking past its recent high at $56 and moving even higher. So let’s play this coming upside using January calls. Here’s the play:

PLAY: Buy the PCU January 52.5 Calls (PCU AX) at or under $3.80, good for the day. Place a protective stop loss at $2.40.

The second, more speculative upside play comes in the form of CBOT Holdings (BOT). You probably remember the 94% winner we had on NASDAQ Stock Market (NDAQ – NASDAQ) based on the raging bull market in publicly traded exchanges. This play is an extension of this thesis, as BOT trades interest rate products like U.S. Treasury bonds as well as agricultural products like wheat, corn, soybeans, and rice. Chat-wise, it appears like BOT has found its near-term bottom at $155 and wants to rally back up to its recent high of $165. Let’s play this upside move into January as well.

BOT

PLAY: Buy the BOT January 165 Calls (BOT AV) at or under $5.20, good for the day. Current bid/ask spread is $4.40 to $4.80. Place a protective stop loss at $3.10.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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