What a Pop!

Maintain Upside Calls – But Stay Protected Too

By Bryan Bottarelli
Friday, April 20, 2007 10:30 AM EDT
Fri, 20 Apr 2007 14:30:00 GMT

Dear Bottarelli Research Member,

This is a rather impressive open for the US markets — as literally every index on my screen (which includes Dow, Nadsaq, S&P, OEX, QQQ, DIA, SPY, TRAN and UTIL) has triggered a new 52-week high. Impressive!

What’s more, we’re also witnessing a very strong International stock market recovery — as I expected when I wrote yesterday’s alert titled “Knee Jerk Selling.” This strength across the pond has pushed shares of iShares MSCI Emerging Markets (EEM – AMEX) $2.00 higher in today’s early action, which has helped your EEM June 125 Calls (EEM FE) trade as high as $4.20 in the early going. Anyone who added these calls to their ledger for $3.10 yesterday is sitting on a 35% overnight gainer, so I’d like to specifically advise those members who bought these contracts for $3.10 to take your profits off the table now.

EEM

PLAY: If you entered the EEM June 125 Calls (EEM FE) yesterday at or under $3.10, then go ahead and sell your calls at or above $3.90, good for the day.

On the same hand, if you’re holding these EEM call contracts from both of our entry prices, then your average buy price is $3.75. In this case, I’d like to maintain the position for further upside gains. And of course, I’ll continue to follow this play for the secondary sell signal.

In terms of our other positions, maintain them all. It will be rather interesting to see if the markets can maintain this early-session strength for all of today’s trading day — because this could give us an indication of what market direction to expect next week. As always, if any further trading action if warranted, you’ll be the first to know. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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