NSC Misses, FMCN Jumps

Maintain $2.00 Sell Orders on NSC

By Bryan Bottarelli
Wednesday, January 24, 2007 9:45 AM EST
Wed, 24 Jan 2007 14:45:00 GMT

Dear Bottarelli Research Member,

This morning, U.S. railroad operator Norfolk Southern (NSC – NYSE) reported lower-than-expected quarterly net profit, as the Norfolk, Virginia company reported fourth-quarter net income of $385 million, or $0.95 cents a share. Wall Street analysts had forecast earnings of $0.96 per share, so this qualifies as an “earnings miss.” In after-market activity, shares were down over $1.00, and as I write, shares are opening lower by $1.75. As a result, maintain your $2.00 sell orders on your NSC March 50 Puts (NSC OJ), as any downside momentum will most likely trigger this sale. The high of the day on the put is $1.80, so we could get filled on any strong down-ticks.

PLAY: Sell your NSC March 50 Puts (NSC OJ) at or above $2.00, good for the day.

At the same time, we’re getting a nice jump in shares of Focus Media (FMCN – NASDAQ). Since entering our FMCN February 80 Calls (QOH BP) for $2.20, the stock has tacked on an additional $2.00, pushing these calls up to $3.00 in today’s action. If we can sell at or above $2.70, let’s take the money off the table and lock in a nice 2-day winner of 22.7%.

PLAY: Sell your FMCN February 80 Calls (QOH BP) at or above $2.70, good for the day.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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