Set-Ups for Next Week

Possible Plays on POT, HNP, CMG, DBD

By Bryan Bottarelli
Friday, June 29, 2007 1:24 PM EDT
Fri, 29 Jun 2007 17:24:00 GMT

Dear Bottarelli Research Member,

If you know my trading style, then you know that I don’t usually open new trades on Friday. Faced with a weekend of time decay and a trading week interrupted by Wednesday’s 4th of July holiday, I’d be inclined to stand pat today and spend the day setting up some possible trade patterns that we could profit off early next week.

I’ve received some notes from members who witnessed the amazing reversal in Cleveland-Cliffs (CLF – NYSE) and decided to hold onto their CLF July 80 Calls (CLF GP).With an average buy price of $3.05 per contract, these calls have traded as high as $2.60 today, so it appears that you could be back into the profit zone very quickly. If you still own this position, maintain it into next week and look to take profits on any extended upside.

CLF

Keeping with the topic of amazing reversals, take a look at this week’s chart of Potash of Saskatchewan (POT – NYSE). You would be hard-pressed to find a more impressive bounce off the 50-day moving average, so I have no reason to think that POT’s upside run is over. We could initiate a new call play next week.

POT

Also triggering a bullish formation is Huaneng Power International (HNP – NYSE).The Chinese power-plant operator is not a common name among Wall Street investing circles, but the stock has been on an amazing upside run that looks to extend itself even further.

HNP

Chipotle Mexican Grill (CMG – NYSE) is another name that’s established near-term support and could make a move up to $100 per share. The stock is getting a lift this week since both Citigroup and Lehman Brothers have initiated coverage, so I’ll continue to chart CMG for a possible upside call opportunity.

CMG

Another name that’s quietly been moving higher is ATM-machine manufacturer Diebold (DBD – NYSE). The stock is commonly associated with their automated voting machines, but their core business segment involves making the very best ATM machines on the market. Just today, in fact, DBD unveiled their new state-of-the-art banking systems in India. If these machines are accepted, DBD could break through the recent resistance point at $52 and move higher.

DBD

Of course, I’ll continue to follow the water-theme that sparked the Itron (ITRI – NASDAQ) play — as I think this water topic (and upside momentum) will not go away anytime soon. And I’ll also continue to follow the oil stocks making strong rebounds. Hess Corporation (HES – NYSE) is one in particular that stands out. What a bounce!

HES

And of course, I’ll also be monitoring any names looking to fall for potential put plays. Starbucks (SBUX — NASDAQ) in particular has been dreadful lately, and a failure at $27.00 could spark a move even lower.

SBUX

You can look forward to profiting off these potential play candidates next week, but until then I wanted to quickly mention the latest success of our new small cap service. If you have yet to join this group, take a look at this note below:

SMALL CAP NOTE: Bottarelli Research Small Caps members just hit 49.15% on JA Solar Holdings (JASO – NASDAQ) and 77.53% on WorldWater & Power (WWAT.OB) and I want to be absolutely sure that you’re participating in these remarkable small-cap winners. In fact, Idaho General Mines (GMO – AMEX) is up 16% just today! If you have yet to join this exciting new service, now is definitely the time to get involved. We’re about to release our latest pick after the close of trading today, so please don’t miss it! For all the details, follow the link below:

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Have a good weekend, and until next week,

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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