LVS Finding Support at $90

Add March 95 Calls Now

By Bryan Bottarelli
Wednesday, February 14, 2007 10:29 AM EST
Wed, 14 Feb 2007 15:29:00 GMT

Dear Bottarelli Research Member,

Early comments from Fed Chairman Ben Bernanke are pushing the major market averages to new all time highs. According the Fed chief, their current rate policy is working — and the central bank stands ready to take anti-inflationary action if conditions change. Based on this news, the rally that we witnessed yesterday is extending itself today, and this offers us an interesting chart formation in Las Vegas Sands (LVS – NYSE).

LVS

As you can see, LVS recently traded as high as $110 per share but has since peeled off $20 and fallen back to the $90 level. The last time LVS fell to $90 was in early 2007, and this level acted as a support point that quickly launched the stock $20 higher. It appears like we could have a similar situation right now. Nevertheless, keep a close eye on this one, because if LVS cannot pop back above its 50-day moving average, we need to move out quickly. But if you’d like to use the market’s strength to make a quick upside trade, then I’d like to enter into some out-of-the-money calls on LVS and profit off a quick upside pop. Here’s the trade:

PLAY: Buy the LVS March 95 Calls (LVS CS) at or under $4.10, good for the day. Current bid/ask is $3.80 to $4.00. Place a protective stop loss at $2.30.

At the same time, we’re seeing nice movement in both our ATI April 110 Calls (ATI DX) and our NYX March 90 Puts (NYX OR), but I’ll address these positions (along with our others) as the day progresses. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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