Serious Intra-Day Volatility

GRMN Could Drop (But Don’t Act Yet)

By Bryan Bottarelli
Tuesday, June 26, 2007 12:00 PM EDT
Tue, 26 Jun 2007 16:00:00 GMT

Dear Bottarelli Research Member,

It’s only Tuesday, but we’ve already witnessed an extreme amount of intra-day volatility. That’s why it’s important to own a balanced ledger of calls and puts. Armed with options on both sides of the market action, we can capitalize on these violent intra-day swings by taking profits on both the call side and the put side. So in the effort to profit off this short-term volatility, let’s take a quick look at the chart of Garmin (GRMN – NASDAQ).

I’m not sure if you’ve noticed, but lately some of the market’s favorite NASDAQ-listed tech stocks have been experiencing weakness. For example, the markets’ #1 favorite tech stock, Apple Computer (AAPL – NASDAQ), is having a hard time breaking above the $125 level. The stock is down almost $3.00 as I write on a day that the markets are up. That’s unheard of!

AAPL

Also turning weaker over the last seven trading days is Research in Motion (RIMM – NASDAQ).As you can see, the stock has dropped $10.00 since June 19th.

RIMM

I bring this to your attention because I think we’ll see a similar reaction in shares Garmin (GRMN – NASDAQ). Take a look:

GRMN

As you can see, the navigational device maker hit the $72.50 level and failed — which could be an indication that the shares are set to fall back down to the $67.50 level. If the weakness in RIMM is any indication, GRMN could have a few more downside days in its future, but let’s wait just a little longer before entering a new put play. The timing is not quite right — but we could be getting close. I’ll keep you fully informed. In the meantime, I’ll continue to monitor the market gyrations and let you know the moment it’s time to enter a new play. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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