Take FDX Profits

Lock in 15% in One Day

By Bryan Bottarelli
Wednesday, December 13, 2006 2:16 PM EST
Wed, 13 Dec 2006 19:16:00 GMT

Dear Bottarelli Research Member,

Our play from earlier this morning on FedEx (FDX – NYSE) is playing out exactly as planned. After entering the FDX January 115 Puts (FDX MC) for $3.90, FDX has continued to move down. As I write, the stock is down $1.70 and looking to extend to the lows of today’s session. This is pushing your puts all the way up to $4.50, good for a 15% gainer in one day. Let’s use today’s weakness to lock in a quick gain.

FDX

PLAY: Sell your FDX January 115 Puts (FDX MC) at or above $4.50, good for the day. If this price does not trigger by the end of today, keep the order open until tomorrow.

Another interesting development today is the news out of the retail sector. Todays 1% rise in November retail sales was ten times better than the 0.1% rise that economists had been forecasting. This is significant for our economy because consumer spending accounts for two-thirds of our total economic activity. Now here’s the important part. Within the various segments of retail (department stores, furniture stores, ext), the strongest sector was auto parts stores.

AZO

This group posted a solid 0.9% percent increase on the heels of their 1% pop in October. Based on the strength in this group, I’ve officially added AutoZone (AZO – NYSE) and Genuine Parts (GPC – NYSE) to my upside watch list. Since there are only two pure retail auto plays on the market, we could have strong trading opportunities in these two names going forward. If a trade opportunity comes up, you’ll be the first to know.

GPC

Plus, let’s go ahead and make our $3.40 sell orders on our PSA March 100 Calls (PSA CT) “good for the week.” That way, we can use any intra-day pop to our advantage.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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