Lock in Profits: Take ETR Gains

Plus: Watch VLO, ATI, DE, and INFY

By Bryan Bottarelli
Wednesday, April 18, 2007 2:11 PM EDT
Wed, 18 Apr 2007 18:11:00 GMT

Dear Bottarelli Research Member,

I’ll keep this short and sweet.

As I write, the Dow has hit a new all time intra-day high of 12,798. This gain has been very impressive considering the significant downside moves from tech heavyweights like Yahoo (YHOO – NASDAQ) and International Business Machines (IBM – NYSE). This solidifies the fact that the market bias continues to be bullish.

But at the same time, I sense that the market makers are acting very cautions at these high levels — because it was only February that we witnessed a severe and violent breakdown at these very same levels. That’s exactly why I recommended entering a new protective put position in the SPY June 150 Puts (SYH RT). This put will protect you against any violet market down-turn — while at the same time enabling us to participate in any continued upside rally. So right now, I’d like to maintain all of our current trading positions — while keeping a close eye on companies that have recently come down and could now be setting up for another upside run.

Top candidates in this category include Allegheny Technologies (ATI – NYSE), Valero Energy (VLO – NYSE), and John Deere (DE – NYSE). At the same time, I’ve received a near-term bearish formation on Infosys Technologies (INFY – NASDAQ), so I’ll be closely monitoring that company for a put play as well.

Plus, following up on yesterday’s comments on Pulte Homes (PHM — NYSE), the stock is up another $1.00 today (supporting my over-sold and bullish thesis). But honestly, I’d like to see one final drop before adding longer-dated calls.

In the meantime, I think it’s a good move if we took our profits off the table on Entergy (ETR – NYSE).

ETR

As I write, the stock has set a new 52-week high at $112.44, which leads me to believe that the stock will keep moving higher. This up-move has pushed your ETR June 110 Calls (ETR FB) from $3.90 up to $4.70, good for a short and sweet 20% gainer. If the markets decide to move lower, I don’t want to watch our profits evaporate — so let’s take the more conservative and safe approach and lock in our gains now.

PLAY: Sell your ETR June 110 Calls (ETR FB) at or above $4.70, good for the day.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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