Apple Popping

Look to Take Profits

By Bryan Bottarelli
Tuesday, January 09, 2007 1:26 PM EST
Tue, 9 Jan 2007 18:26:00 GMT

Dear Bottarelli Research Member,

Two critical developments have happened since we last spoke…

First and foremost, shares of Apple Computer (AAPL – NASDAQ) are shooting aggressively higher as the company just unveiled their new iPhone at their technology conference. This was the exact thesis behind us buying the AAPL February 90 Calls (QAA BR) yesterday — and today’s move is handing us a nice 2-day profit. As I write, the calls you entered for $4.00 have traded as high as $4.70, good for a quick 17.5% gainer. Let’s go ahead and use today’s momentum to take our profits off the table.

AAPL

PLAY: Sell the AAPL February 90 Calls (QAA BR) at or above $4.70, good for the day.

The other critical development is that oil prices — down around $1.95 at one point today — have rebounded. As I write, oil is down only $0.24 a barrel, possibly marking the turnaround point I’ve been discussing. As you know, the OIH February 140 Calls (OIH BH) that we played have been stopped — but the time could be fast approaching to re-enter. In fact, an oil rebound could have an effect on the entire commodities market, opening up ideal trading opportunities in the near-term.

To avoid the intra-day volatility that we’ve recently seen, I’ll probably initiate new positions with an April expiration cycle — so we can benefit on a rebound without suffering through mid-day peaks and valleys. I’m looking closely at names like Marathon Oil (MRO – NYSE) and Halliburton (HAL – NYSE), and when it’s time to enter a trade you’ll be the first to know. Until then, take AAPL profits — and as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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