Play PCU Calls

Metals Rebound & Merger Talk

By Bryan Bottarelli
Monday, June 11, 2007 2:21 PM EDT
Mon, 11 Jun 2007 18:21:00 GMT

Dear Bottarelli Research Member,

I started off today’s trading session with a study of the Dow Jones Utility Average (UTIL), and as the day progressed the components of this index have gradually moved higher. Therefore, we could soon have two new upside plays on Entergy (ETR – NYSE) and Dominion Resources (D – NYSE).But for today, I think the best opportunity comes in the form a company I highlighted last week: Southern Copper (PCU – NYSE).

PCU

After suffering through a very bad week, we’re seeing strong rebounding action on precious metals today — as gold in particular is up $8.70 as I write. At the same time, there’s talk circulating that some of the most leveraged metals companies could be the next major Wall Street acquisition targets — and this all supports upside momentum for shares of PCU. Toss in a strong stock chart indicating further upside action an, we have all the makings for a play. So let’s get positioned now!

PLAY: Buy the PCU July 90 Calls (PCU GR) at or under $4.90, good for the day. Current bid/ask spread is $4.50 to $4.80. Place a protective stop limit at $3.20.

Our oil plays are also on the move today, as both the IMO July 45 Calls (IMO GI) and the SII July 60 Calls (SIK GL) have traded right at our original entry prices. Come tomorrow we could be taking profits on each position — so if you’re still holding them maintain both positions for further upside.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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