Add FDX Calls

Play the Gap-Down

By Bryan Bottarelli
Wednesday, March 21, 2007 3:02 PM EDT
Wed, 21 Mar 2007 19:02:00 GMT

Dear Bottarelli Research Member,

As I indicated earlier today, the Fed would most likely keep short term interest rates locked at 5.25%, but the language of the announcement would be the determining factor in how the markets react. With the Dow trading 100 points higher as I write, it’s clear that Mr. Bernanke has once again eased investor fears and orchestrated a market rally.

Upside moves like this are why its’ always smart to take put profits off the table as soon as possible. Case in point, the sell advice on recent put winners like KHB, WY, and QCOM were timed perfectly. Upside moves like this are also why I continue to maintain upside positions on LMT June 100 Calls (LMT FT), NDAQ June 30 Calls (NDQ FF), and AGN April 115 Calls (AGN DC). As I write, today’s upside has brought all three positions close to break even. And in terms of LMT, we’re about to break into positive territory. Maintain all positions for further upside.

At the same time, I’d also like to add another new call on FedEx Corporation (FDX – NYSE). The stock was down over $4.00 this morning on (what appeared to be) fantastic earnings news. But now FDX has recovered all of their mid-session losses and looks ready to actually turn positive. It’s a remarkable recovery — so lets use the market momentum to take advantage of this buying momentum and add FDX calls now!

FDX

PLAY: Buy the FDX May 115 Calls (FDX EC) at or under $2.60, good for the day. Current bid/ask spread is $2.35 to $2.55. Place a protective stop loss at $1.60.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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