DOW Follow Up

Sell Puts (If You’re Still In)

By Bryan Bottarelli
Thursday, April 05, 2007 11:55 AM EDT
Thu, 5 Apr 2007 15:55:00 GMT

Dear Bottarelli Research Member,

I mentioned that I’d continue to follow the movements of Dow Chemical (DOW – NYSE). After all, I recommended the DOW May 45 Puts (DOW QI) for $1.75 because the stock was jumping higher based on unsubstantiated takeover rumors — and I figured that any upside would come unraveled if the rumors did not materialize. If you’re still holding this DOW play, then you’ll like what you’re seeing today — check it out:

DOW

Although it took a little longer than I expected, the down-move is finally starting to come into play — and this has pushed your DOW May 45 Puts (DOW QI) into profitability. If you’re still holding this position, I recommend that you take the money off the table now!

I’d also like to take profits off the table if our VLO May 65 Calls (VLO EM) trade up to $3.90 per contract. They’re currently trading between $3.50 and $3.70. A $3.90 sale would hand you a nice 32% gainer, so set a $3.90 sell order and see if it gets filled by the day’s end.

PLAY: Sell your VLO May 65 Calls (VLO EM) at or above $3.90, good for the day. If prices do not trigger today, then maintain the position into next week.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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