A Quick Put Play

Play U.S. Steel (X – NYSE)

By Bryan Bottarelli
Tuesday, June 26, 2007 2:35 PM EDT
Tue, 26 Jun 2007 18:35:00 GMT

Dear Bottarelli Research Member,

I’ll keep this short and sweet.

I wrote to your earlier about the possibility of United States Steel (X – NYSE) finding support at the 50-day moving average. But now, the latest chart pattern shows a potential chink in the armor — as shares of X have dipped below this critical level. If this level converts from support to resistance, X could drop $10 in the blink of an eye, so I’d like to make a very quick play on US Steel July puts. Here’s the intra-day chart:

X

This is a pure momentum play that looks to capitalize on the markets’ recent intra-day swings to lock in a quick gainer on U.S. Steel, so here’s the trade:

PLAY: Buy the X July 110 Puts (X SB) at or under $5.00, good for the day. Current bid/ask spread is $4.70 to $4.90. Place a protective stop limit at $3.10.

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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