Pre-Market RIG Alert

Shares Trading Higher, Take Profits!

By Bryan Bottarelli
Wednesday, February 14, 2007 9:07 AM EST
Wed, 14 Feb 2007 14:07:00 GMT

Dear Bottarelli Research Member,

As of 8:31 this morning, shares of Transocean (RIG – NYSE) are trading higher by $1.25 as their net profit in the 2006 fourth quarter rose to $621 million ($2.05 per share) compared with $152 million ($0.45 cents per share) in the same quarter a year earlier.

They posted overall earnings per share of $1.25 which beat the $1.19 average forecast — and reported revenue of $1.19 billion compared to $771 million a year earlier. In short, it was an absolute blowout quarter for RIG, and I’d like us to take full advantage.

The RIG March 80 Calls (RIG CP) that we’re holding with a cost basis of $1.90 look to have a nice jump today, and I consider them a sell anywhere at or above $2.30 per contract. Of course, there’s a good chance these calls will jump a lot higher than $2.30 at the open, but let’s use $2.30 as our most conservative exit price. I also expect to see some pricing volatility, similar to what happened when shares of DO announced their earnings, but I still think we’ll be able to get a great sell price based on the pre-market indications. So let’s look to use RIG’s upside to take our profits off the table.

PLAY: Sell your RIG March 80 Calls (RIG CP) at or above $2.30, good for the day.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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