Add CMG Calls
A Quick Upside Play
Dear Bottarelli Research Member,
The Dow just ticked up 300 points on the day. What a move. And while I still think we’ll see weakness over the next few days, I’d like to avoid the risk of letting my personal directional opinions effect our trading tactics. Therefore, I’ve just scanned through a long list of stock candidates looking specifically for any stock poised to continue moving higher despite what happens in the broader markets, and the best candidate comes in the form of Chipotle Mexican Grill (CMG – NYSE).
As you can see from the chart, CMG is bouncing nicely off its 50-day moving average, which signals to me that the October high of $140 could soon be taken out. If this happens, then we could have a nice short-term winner playing the CMG December 135 Calls (CMG LG). Of course, I plan to be extremely nimble here. In other words, if we see any short-term gains, I’d like to lock in these gains prior to any market sell-off. But just to ensure that we’ll participate in any further upside, let’s add this one call position to our ledger now.
PLAY: Buy the CMG December 135 Calls (CMG LG) at or under $5.10, good for the day. Current bid/ask spread is $4.20 to $5.00. Place a protective stop limit at $2.80.
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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