The Last Day of April

Trim Call Profits

By Bryan Bottarelli
Monday, April 30, 2007 9:47 AM EDT
Mon, 30 Apr 2007 13:47:00 GMT

Dear Bottarelli Research Member,

As we being the last trading day of April 2007, let’s take a moment to step back and look at where we stand. As of today’s market data, April has registered as the best month for stocks in three and a half years. In fact, if you look at the markets’ yearly gain of 5.3%, nearly all of this came in the month of April.

A word of caution here: Don’t forget that the 2006 sell-off began in May. And don’t lose sigh of the common phrase “sell in May and go away.” I honestly feel that we’ll see a weak market in May — and I want to be sure that we’re correctly positioned to profit off any market corrections. Of course, that means maintaining a position in the SPY June 150 Puts (SYH RT).

SPY

But it also means adding new puts — and taking profits off the table quickly on our existing calls. As I write, our AMZN June 60 Puts (ZQN RL) are getting a lift as the stock is taking a breather today. Maintain this downside positing for more gains.

AMZN

Let’s also keep a close eye on the APC June 50 calls (APC FJ). The company releases earnings sometime today — and it may be a good idea to take our profits off the table in advance of this announcement. As I write, the calls that you entered for $1.05 have traded as high as $1.20, so if you’d like to take a cautions approach — then go ahead and lock in your gains here.

APC

Of course, you can always swing for the fences and hold on for a strong earnings announcement, but that’s a decision of risk versus reward. The cautions approach would be to lock the gains — on at least half of the position — right now.

Also keep a close eye on the ATI June 115 Calls (ATI FC) and the CMC June 35 Calls (CMC FG). I’d like to lock in any profits on near term price jumps. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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