Can the Pop Hold?

Plus, BEN & MCO Updates

By Bryan Bottarelli
Wednesday, August 29, 2007 10:20 AM EDT
Wed, 29 Aug 2007 14:20:00 GMT

Dear Bottarelli Research Member,

As we emerge from yesterday’s brutal 280-point sell-off, the Dow has opened the day higher. As you can see from the chart below, the Dow is bouncing above the 200-day moving average. While this is a good initial sign, we need to see if the major market averages can sustain this bullishness throughout the day — so I’ll be closely monitoring each and every tick.

INDU

In the meantime, let me quickly address our put position on Franklin Resources (BEN – NYSE). As you know, I recommended BEN September 130 Puts (BEH UF) on August 20th for $6.00 per contract — and since that recommendation these puts have been on quite a wild ride. Because of this volatility, I mentioned that I would like to maintain this downside position despite the fact that this position hit our original stop limit price of $3.50. For anyone who is still holding onto this play, your persistence has paid off. As I write, these puts traded as high as $7.50, good for another nice 25% winner. If you’re still holding this play, go ahead and lock in these gains now!

BEN

PLAY: Sell your BEN September 130 Puts (BEH UF) at or above $7.50, good for the day.

Let’s also keep a close eye on our MCO September 50 Puts (MCO UJ), because this position is also on the verge of a “take profits” alert as well. I’d like to see MCO fall to a new 52-week low before issuing this alert, so let’s wait a little and let the stock fall even further.

MCO

When it’s time to lock in the gain, you’ll be the first to know. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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