Take FXI Profits
Lock in Quick 34% Gainer
Dear Bottarelli Research Member,
As I noted yesterday, we’re at a very dangerous point in the major market averages. As you can see below, the Dow has now ruptured its critical 50-day moving average, and this could now lead to a re-test of the 200-day moving average 300 points below current levels.
If we see these losses, there’s a very good chance that the iShares FTSE/Xinhua China 25 Index (FXI – NYSE) is due for a major correction. When you compare the Dow chart (above) to the FXI chart (below), you’ll see just how much the FXI could realistically fall if the bears take firm control of the global markets. In short, the FXI could fall $40.00 just to get even with the technical levels we’re seeing on the Dow.
As I write, the FXI November 200 Puts (FNQ WR) that we entered yesterday for $5.80 have traded as $8.00, good for a nice overnight 37% gainer. While I do think these gains can continue, I’d like to lock in our profits now. After all, we can always re-enter this play on continued weakness, but the prudent course of action here is to take our money and run!
PLAY: Sell your FXI November 200 Puts (FNQ WR) at or above $7.60, good for the day.
I’ll be on the lookout for additional put opportunities today, so you might receive another alert as the day progresses. Until then…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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