Time to Move

Get Aggressive for One Last Push

By Bryan Bottarelli
Thursday, May 24, 2007 10:10 AM EDT
Thu, 24 May 2007 14:10:00 GMT

Dear Bottarelli Research Member,

As I mentioned yesterday, this bull market is not going down without a fight. Leading into a long Memorial Day weekend, I don’t think we’ll experience any major downside moves prior to next week — so I’d like to get a little more aggressive here and add to some of our call positions. But first thing’s first: Up the ante on your protective SPY June 150 Puts (SYH RT).

SPY

As you can see by today’s chart, the SPY looks to have exhausted its upside momentum — except for perhaps one final upside pop. With the SPY June 150 Puts (SYH RT) now trading for under $1.00, we could be buying at just the right time, so let’s go ahead and add to our position now.

PLAY: Buy more SPY June 150 Puts (SYH RT) at or under $1.00, good for the day. Current bid/ask spread is $0.90 to $0.95.

Once we’ve upped our downside protection, we can take a more aggressive stance on our existing call plays, and the strongest mover today is Devon Energy (DVN – NYSE). The stock looks to have found near-term support at $78.00, so let’s go ahead and add to our calls.

DVN

PLAY: Buy the DVN June 80 Calls (DVN FP) at or under $1.45, good for the day. Place a protective stop limit at $0.80.

Also handing us a “buying dip” is InterContinental Exchange (ICE – NYSE). We all know that ICE moves up and down very fast, so the trick is to maintain a position to capitalize on any forthcoming upside pops. With the stock down another $2.50 in early trading, I’d like to add to our ICE June 150 Calls (IHH FJ).

ICE

PLAY: Buy more ICE June 150 Calls (IHH FJ) at or under $5.60, good for the day. Lower your stop limit down to $4.00.

And finally, let’s add to our LVS June 80 Calls (LVS FP) as well. I think that any further merger or takeover news will push LVS up rather quickly, and I want to be positioned to ride any news-related pops.

LVS

PLAY: Buy more LVS June 80 Calls (LVS FP) at or under $2.60, good for the day. Lower your stop limit to $1.40.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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