Getting Awfully Pricey

Play PCU Calls, But Also Add SPY Puts

Dear Bottarelli Research Member,

First thing’s first: Let’s go ahead and add to our protective SPY June 150 Puts (SYH RT). Currently trading for the bargain price of $1.85 to $1.95 per contract, these puts protect us against any sharp downside corrections looming on the horizon. Owning cheap downside exposure makes lots of sense here, so let’s not even mess around. Add to this position now.

Secondly, let’s add a new upside call position in Southern Copper (PCU – NYSE). As I look at todays chart, all signs point to a blast-off coming soon, and I want to use the market’s unrelenting strength to ride this upside. Here’s the play:

PLAY: Buy the PCU June 85 Calls (PCU FQ) at or under $2.80, good for the day. Current bid/ask spread is $2.60 to $2.75. Place a protective stop limit at $1.70.

Also noteworthy today is Commercial Metals (CMC – NYSE). If you recall, I jumped the gun and exited the CMC June 35 Calls (CMC FG) before they hit our designated stop price – and perhaps this was premature of me. As I write, the stock has recovered and it attempting to challenge their previous high of $35. If you’re still in this position, I’ll continue to monitor it for you. It’s looking much better!

Also noteworthy today is our long-standing downside thesis on biotech “loser” InterMune (ITMN – NASDAQ).

The stock is finally witnessing the downside pressure that I feel is vastly overdue – sparked today on the news that their first-quarter loss grew to $20.8 million ($0.61 per share). This loss came in $0.08 higher than the Thomson Financial estimate of $0.53 per share, which could finally start prompting investors to sell. It the momentum picks up, you’ll be glad you own the ITMN July 20 Puts (IQY SD).

In terms of our AMZN June 60 Puts (ZQN RL), this position is officially stopped – as I continue to marvel at anyone who is buying AMZN at these grossly inflated price levels. I truly feel that we’ll wake up one day and see AMZN down $5.00 on an analyst downgrade on valuation – but until then this position is closed.

Switching gears, I’ve received a handful of notes from Charter Members who are considering joining our new Bottarelli Research Small Caps service – and they’re asking me for a little information on the specific companies that we’re currently recommending in this new service. At the same time, I’ve also received some tremendous notes from Charter Members who joined Bottarelli Research this week and are already prospering from this new service. For example:

A STUNNING EXAMPLE OF GOOD OLD FASHIONED INVESTMENT RESEARCH

I TOOK ADVANTAGE OF YOUR NEW SMALL CAPS SERVICE: I CAN ONLY SAY IS “WOW”

For more information on Bottarelli Research Small Caps, click here:

http://www.bottarelliresearch.com/small-caps/offer/O2710K2SYZ/

Now this is important: After the close of trading today, Small Caps readers will receive a complete update alert which reviews all of our open positions – plus gives you the top nine (9) small-cap picks you can buy immediately. Plus, we’re also recommending our newest pick of the week in this afternoon alert as well. So to answer all the questions I’ve been receiving about current small cap positions, here is a short and quick run-down everything we have going. Check it out!

BUY: This $2.20 company is China’s leading supplier of high grade metallurgical coking coal – and it’s this metallurgical coking coal that is used for the purposes of steel manufacturing. Once you see what their last earnings were over 2006, you’ll agree that this play’s potential is truly stunning. And I do mean stunning.

BUY: This $2.20 company is the world class leader in damage-control services for oil and gas companies across the globe. They were the guys in Kuwait leading the effort to put out the hundreds of oil well fires set by Iraqi troops in the first Gulf War. They were also selected by the U.S. Department of Defense for control and restoration of Iraq’s southern oilfields in March of 2003. $6.00 per share is quite possible, and soon.

BUY: This $1.55 company is offering the medical profession the ability to understand the effects of certain prescriptions on patients before they’re even administered. Their proprietary technology locates and analyzes genetic variations in certain regions of DNA – and these diagnostic tests can aid in the early detection of cancer by identifying individuals with disease susceptibility. It’s an absolute steal for only $1.55.

BUY: This $3.50 company is dedicated to the acquisition and development of potential uranium properties within the United States. They begin to drill in July – which means now is the time to own these guys, before the drills start to turn and the results are out.The moment any positive news breaks about drill results, you could see an explosive return by late-July or early August. And I do mean explosive.

BUY: This $1.75 company is what we call a “buy now or say goodbye” play. They’re about to steal market share from heavyweights like Cisco Systems (CSCO – NASDAQ) and Juniper Networks (JNPR – NASDAQ). Capturing just a 5% market segment would grow this stock into a +$500M business, multiplying your money at a very high rate.

BUY: This $3.25 company just went public on November 6^th, and right out of the gate it nearly doubled. But since then it has pulled back – and now’s the time to buy. They own the sole rights to a new coal bed methane recovery technology that could soon be the gold standard across the country, making this relatively new and under-followed stock a true gem.

BUY: This $6.50 company is a pure play on molybdenum, which is a necessary alloy in all steels. They control one of the great metal deposits of North America! With 1.3 billion pounds of recoverable molybdenum and a 50+ year mine life, the stock looks like a play you’ll own for years to come.

BUY: When we first recommended this $9.50 company on Friday March 23^rd, it was a bulletin board stock. But now it’s moved over to the NASDAQ. This is an extremely bullish sign – proving that this company is attracting many, many new investors. As a result, it has a lot of room to move. After all, revenues grew almost 350% in Q4, and the upside gains are just getting started!

ALREADY UP 36%: And finally, this stock (which our newest small cap readers were able to enter on Tuesday for $15.10) just traded for $21.81. That’s a 44% gain already! In the days leading up to May 15^th, the gains could get even more explosive. I can’t really go into any more detail on this play — you have to be a Bottarelli Research Small Caps reader to get the complete run-down. Mark my words: You do NOT want to miss out on this stock’s action!

For all the information on locking in your space to this group, simply follow this link below:

http://www.bottarelliresearch.com/small-caps/offer/O2710K2SYZ/

And remember, if you join Bottarelli Research Small Caps today — you won’t miss a beat! The first small-cap alert will be issued after the close of trading today, so join now and you’ll hit the ground running!

And as always…

Lock and load

Sincerely,