Take LEH Profits, Part II

Stock Dropping Over $3.00

By Bryan Bottarelli
Wednesday, March 14, 2007 10:21 AM EDT
Wed, 14 Mar 2007 14:21:00 GMT

Dear Bottarelli Research Member,

Just to follow-up on my earlier alert — it’s time to take our Lehman Brothers (LEH – NYSE) profits off the table. As I write, the stock is down another $3.00 and your LEH April 70 Puts (LES PN) have traded as high as $4.10, good for an overnight gain as high as 60%. Just look at this chart:

LEH

PLAY: Sell your LEH April 70 Puts (LES PN) at or above $3.10, good for the day.

Also maintain your $5.00 sell on your MRO April 95 Puts (MRO PS).Even thought the oil sector opened on the upside, your MRO puts have held their value rather impressively. They’re currently trading between $4.40 and $4.50, and I think we’ll see the $5.00 price trigger on any coming down-tick.

Also moving nicely in our direction is our newly-established DIA April 121 Puts (DAW PQ).We entered them yesterday for $2.00 and they’ve already traded as high as $2.40 in today’s trading, good for a quick 20% gainer. Continue to hold this protective position for more gains.

DIA

And finally, I still like all of our call plays. The ATI April 110 calls (ATI DX), the LMT June 100 Calls (LMT FT), and even the NDAQ June 30 Calls (NDQ FF) will all bounce our way when the broad-based market finds a near-term support point. I seem to think that Dow 12,000 will act as a strong support level — and that’s only 71 points below current levels. I would look to add to our call positions if we dip down and hold at this level.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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