I Had No Idea

AMX, INFY, NDAQ, and NYX All Looking Strong

Dear Bottarelli Research Member,

I’m a slightly superstitious guy, which makes me a little apprehensive about issuing a new trade on Friday the 13^th. But while doing some research late last night, I came across an article that absolutely blew my mind — and I’d like to share it with you today.

The story came from Forbes magazine — where they highlighted Mexican telecom mogul Carlos Slim. In their latest wealth rankings, Forbes calculated that Slim has quietly overtaken Warren Buffett as the world’s second-richest man — and is also very close to overtaking the #1 spot from Bill Gates. As of last month, Slim’s fortune rose $4 billion to $53.1 billion while Buffett’s fell to $52.4 billion. So why am I bringing this up? Because Slim is owner of a stock that we’ve successfully played in the past: America Movil S.A.B. de C.V. (AMX – NYSE)

To be honest, I never knew that AMX was hammering out such a powerful cash position. But being in the right place at the right time — combined with a larger rally in Mexican stocks — typically equates to a hoard of cash. And this makes me re-consider establishing a new upside position in AMX. As you can see by the chart, the stock looks to be setting itself up for another run at a new 52-week high north of the $51 level, and when AMX moves - it moves fast. I particularly like the AMX options string because they’re quite cheap for a $50 stock that has a history of volatility, so let’s go ahead and establish a cheap AMX call position and ride any quick upside moves next week. Here’s the play:

PLAY: Buy the AMX May 50 Calls (AMX EJ) at or under $2.20, good for the day. Current bid/ask spread is $2.00 to $2.15. Place a protective stop loss at $1.10.

India’s Infosys Technologies (INFY – NASDAQ) is another name that we’ve mentioned in these pages — and shares are on the move after the Bangalore-based outsourcing firm announced a strong 70.4% pop in net profit. They also predicted that revenues would grow as much as 30% this year — which initially pushed the stock $2.50 higher. But as you can see by the chart, the combination of today’s weak market internals plus profit-taking has pushed INFY’s initial surge significantly off today’s high — which means we could have ourselves an attractive entry price on INFY early next week. Keep this one on your radar screen.

Also on the move today is NASDAQ Stock Market (NDAQ – NASDAQ) on fresh news that stock exchange operator OMX has indeed spoken to NDAQ about a possible synergy. As I mentioned yesterday, any speculation about a deal could push NDAQ shares higher — and that’s exactly what’s happening this morning. Although it may not look too exciting chart-wise, it would actually be rather significant if NDAQ finally breaks through the 50-day moving average (noted in blue).

Any agreed upon deal could blast the shares past the 200-day moving average, which would be a great lift for our NDAQ June 30 Calls (NQD FF). In fact, these calls have traded as high as $2.50 in today’s action — a very strong move off the $1.75 they were trading for yesterday. We could have a big winner on our hands here, so hold for more gains.

Not only that, but also benefiting from the NDAQ merger talk is names like NYSE Group (NYX – NYSE) and InterContinental Exchange (ICE – NYSE), as each stock is up in early action.

The NYX May 95 Calls (NYX ES) that we entered yesterday for $4.60 have traded as high as $5.20 today, so hold this position for more gains as well. And as always,

Lock and load!

Sincerely,