Time to Get Back in the Game

Enter Two New September Calls

By Bryan Bottarelli
Wednesday, August 08, 2007 11:11 AM EDT
Wed, 8 Aug 2007 15:11:00 GMT

Dear Bottarelli Research Member,

After sitting out yesterday’s trading action, it’s time to get back into the game.

It appears that the tremendous intra-day volatility we’ve witnessed over the past week (sparked by the credit market concerns) is now starting to subside. And now that the Fed has announced their policy statement, it looks like we can get back to doing what we do best: Hitting a series of consecutive winning trades. So let’s get started!

What I’m recommending today are stocks that have been engaged in a very strong up-trend — but have recently fallen back to their 50-day moving averages. Upon finding strong support at these levels, the table is set for another upside run, and I’d like to capitalize on this situation using September calls. Today’s first candidate is First Solar (FSLR – NASDAQ).

FSLR

The company designs, manufactures, and sells polycrystalline semiconductor materials that convert sunlight into electricity, and when the solar sector gets upside momentum, the upside potential is enormous. Today, the entire sector is on the move thanks to earnings news from Bottarelli Research Small Cap holding JA Solar (JASO – NASDAQ), which announced that their Q2 earnings more than quadrupled on the rapid growth of solar cells. This should offer new wave of momentum across the sector, so let’s get positioned to ride the upside into September via FSLR calls. Here’s the play:

PLAY: Buy the FSLR September 110 Calls (QHB IB) at or under $11.00, good for the day. Place a protective stop limit at $6.00.

Another stock to get positioned in right now is Precision Castparts (PCP – NYSE).

PCP

As you can see from the chart, the aerospace, industrial, and automotive metal component maker has been a model of upside strength throughout the market’s recent volatility, and I fully expect the stock to break out to new 52-week highs soon. As a “safer” upside play, I’d like to enter September calls on PCP as well.

PLAY: Buy the PCP September 140 Calls (PCP IH) at or under $7.60, good for the day. Place a protective stop limit at $4.00.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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