Play CHL Calls

A Quick Upside Friday Play

By Bryan Bottarelli
Friday, September 14, 2007 10:20 AM EDT
Fri, 14 Sep 2007 14:20:00 GMT

Dear Bottarelli Research Member,

Despite a weak August retail number, a downgrade of Intel, and U.K. mortgage lender Northern Rock re-igniting credit fears after calling on the Bank of England for emergency funding, the Dow trimmed an early 100-point loss into (currently) a 23 point decline. Perhaps the Fed’s latest cash injection is easing any downside fears ahead of next week’s meeting?

INDU

While we continue to wait and see how the Dow reacts to his critical 50-day moving average, we have the opportunity for a quick upside play on China Mobile Limited (CHL – NYSE).As you can see by the chart below, CHL has been a remarkably strong upside gainer, and today’s new 52-week high indicates that the momentum is far from over.

CHL

China Mobile serves 301 million mobile telecommunication subscribers in Mainland China and Hong Kong, and what I really like about this play is that their call options appear to be cheaper than similarly-priced strings. As I write, you can pick up the CHL October 70 Calls (CHL JN) under $4.00 per contract, so let’s go ahead and make a quick upside play on a stock that is showing no signs of slowing down.

PLAY: Buy the CHL October 70 Calls (CHL JN) at or under $4.10, good for the day. Current bid/ask spread is $3.80 to $3.90. Place a protective stop limit at $2.00.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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