Add PCAR Calls

Maintain ATK Sell & BEN, MCO Puts

By Bryan Bottarelli
Wednesday, August 22, 2007 2:28 PM EDT
Wed, 22 Aug 2007 18:28:00 GMT

Dear Bottarelli Research Member,

A quick look at the SPY chart below shows that the index is trying its very best to hold the line here at the 200-day moving average. Take a look:

SPY

Thus far, the major market averages have been able to hold onto today’s gains, but as we all know, it’s anyone’s guess what’ll happen going into the last hour of trading. Therefore, continue to work your sell orders on the ATK October 105 Calls (ATK JA). As you can see below, the stock looks poised to continue moving higher, so let’s capitalize on any further up-ticks by locking our profits.

ATK

At the same time, let’s also maintain our BEN September 130 Puts (BEH UF) and our MCO September 50 Puts (MCO UJ). Both stocks have gotten weaker as the day progressed, so all it’ll take it one strong down-move and we’ll be locking in gains on each position. Looking specifically at BEN, if the stock is unable to break the 50-day moving average, it’s once again in for a downside move — and we want to be positioned to profit off this coming fall.

BEN

Now, since we closed out our UA October 65 Calls (UA JM) for a modest gainer this morning, I’d like to replace this call position with a new upside play on Paccar (PCAR – NASDAQ). The company designs, manufactures and distributes light, medium, and heavy duty truck parts, and as you can see from the chart below, it has found solid support at its 200-day moving average — which signals that a possible move up to the 50-day could come in short order. Let’s profit off this move using September 80 calls. Here’s the play:

PCAR

PLAY: Buy the PCAR September 80 Calls (PAQ IP) at or under $4.80, good for the day. Current bid/ask spread is $4.30 to $4.70. Place a protective stop limit at $2.40.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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