Play FWLT Calls

Getting Set for Next Week

By Bryan Bottarelli
Friday, September 28, 2007 10:17 AM EDT
Fri, 28 Sep 2007 14:17:00 GMT

Dear Bottarelli Research Member,

I’d like to establish a position today that sets us up for early next week — and it comes in the form of Foster Wheeler (FWLT – NASDAQ). As you can see from the chart below, the global engineering and construction firm (which serves sectors like oil and gas, oil refining, chemical/petrochemical, pharmaceutical, environmental & power generation) could be establishing a near-term low as we speak — which sets the stage for another upside run at their 52-week high over $135.00.

FWLT

We could be getting in a little early here, but I’d rather catch the move sooner rather than later. Having said that, here’s the play:

PLAY: Buy the FWLT October 135 Calls (UFB JU) at or under $4.80, good for the day. Current bid/ask spread is $4.50 to $4.60. Place a protective stop limit at $2.60.

Also moving higher is Bunge (BG – NYSE). In fact, the stock just hit a new 52-week high at $106.31, and this has pushed your BG October 105 Calls (BG JA) all the way up to $4.70. That’s a nice little 23% gain off yesterday’s entry price, so let’s continue to hold for more gains.

BG

At the same time, I’d also like to stress the importance of marinating some downside exposure via our SHLD October 125 Puts (KTQ VE).

SHLD

Today’s chart still shows no signs of an extended bullish run, so there’s a good chance that I’ll add to this position next week. For now, keep holding your puts. And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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