Add CHL Puts
Plus, Maintain RIMM
Dear Bottarelli Research Member,
With the Dow now trading lower by 157 points, its’ once again time to establish a China-based put position — and let’s begin the search by looking first at China Life Insurance (LFC – NYSE).
As you can see by the chart, LFC is currently sitting right at its 50-day moving average, which could be a near term support level. Keeping that in mind, let’s now look at China Mobile Limited (CHL – NYSE).
As you know, we’ve successfully played puts on CHL in previous trading alerts. And unlike LFC, you can see that China Mobil still needs to move down another $10.00 before testing its 50-day moving average. On a big-picture scale, I think that all of these China-based plays need to test their critical technical levels before engaging in their next major upside put, and for that reason, I feel that CHL could fall another $10.00 in short order. Because of this technical reading, CHL is definitely the stronger put play candidate, so let’s add December puts on CHL to our ledger now!
PLAY: Buy the CHL December 90 Puts (CHL XR) at or under $7.90, good for the day. Current bid/ask spread is $7.10 to $7.50. Place a protective stop limit at $4.10.
At the same time, let’s continue to hold the second half of our RIMM November 130 Calls (RUL KV). Despite today’s weakness, RIMM continues to push higher, so I’d like to maximize our gains as much as possible. When it’s time to take our remaining profits off the table, you’ll be the first to know. Until then…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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