An Afternoon Rally?

Markets Once Again Moving Up: Play LVS

By Bryan Bottarelli
Tuesday, May 22, 2007 1:09 PM EDT
Tue, 22 May 2007 17:09:00 GMT

Dear Bottarelli Research Member,

Here we go again…

Within the last hour, the markets have once again turned higher — and I’d like to use the upside momentum for a quick play on Las Vegas Sands (LVS – NYSE).

LVS

As you can see, the stock (which has been unjustly beaten down over the past month) is back on the move today thanks to Kirk Kerkorian’s plan to buy the Bellagio and City Center properties owned by MGM Mirage (MGM – NYSE). Given the history of LVS, the stock could use today’s momentum as the catalyst to easily tack on another $5.00 in a short period of time, so let’s play this upside run via June calls. Here’s the play:

PLAY: Buy the LVS June 80 Calls (LVS FP) at or under $3.40, good for the day. Current bid/ask spread is $3.10 to $3.30. Place a protective stop limit at $1.90.

Also, our trade on ISRG June 130 Puts (AXQ RV) has been officially stopped. The failure of the markets to push lower has forced us to close this position — despite the fact that ISRG has been an under-performer as the markets pushed to new highs.

ISRG

Looking at the chart, I still think the stock could give up $10 very quickly, but for now the best course of action is to close the position. We could always re-enter if (and when) the markets begin to move lower.

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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