Play TSO Calls!

Oil Stocks Bouncing

By Bryan Bottarelli
Tuesday, July 10, 2007 11:36 AM EDT
Tue, 10 Jul 2007 15:36:00 GMT

Dear Bottarelli Research Member,

We’re “locking and loading” some serious gains today, so with the markets attempting to make an impressive intra-day reversal, why stop now?

First off, if you were not able to sell your HTE August 30 Calls (HTE HF), maintain your orders and you’ll probably get filled by the end of the trading session. I just saw a $2.80 price tick cross the tape, so you’re indeed getting a second exit opportunity right now.

Second off, congrats on your CAT and VLO gains. Each stock has continued to move higher since our earlier alert, so be sure to lock in even better prices if you haven’t already done so.

Thirdly, let’s establish a new call position in Tesoro (TSO – NYSE). The company manufactures and sells gasoline, jet fuel, diesel fuel, and heavy fuel oils primarily in the western United States, and similar to our trade on VLO, the stock is showing all the signs of moving higher.

TSO

Now that TSO has broken above the 50-day moving average, I suspect that this level will once again serve as a support level — and this means that TSO could easily rally up past its latest high at $65.00. To capitalize on this move, let’s go ahead and enter August TSO calls now. Here’s the play:

PLAY: Buy the TSO August 62.5 Calls (TSO HU) at or under $3.10, good for the day. Current bid/ask spread is $2.90 to $3.00. Place a protective stop limit at $1.70.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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