Take CMI Profits!

Maintain PBR and BG

By Bryan Bottarelli
Monday, December 17, 2007 3:14 PM EST
Mon, 17 Dec 2007 20:14:00 GMT

Dear Bottarelli Research Member,

The markets have been weak all day long, and now it appears like we’re getting into over-sold territory. On Friday, for example, the Dow dropped 178 points — and today we’ve traded lower by 150. That’s 328 points of weakness over the last two trading sessions, and judging by the markets’ recent volatile behavior, we should see buying interest coming soon. As a result, let’s go ahead and lock in our one-day gains on the CMI January 120 Puts (CDM MD).We entered these puts earlier this morning for $7.20 and they just traded as high as $9.10. That’s a respectable 26% return, so let’s lock it in now!

PLAY: Sell your CMI January 120 Puts (CDM MD) at or under $8.80, good for the day.

Also, it’s nice to see that our BG January 120 Calls (BG AD) have held up so well today. Maintain your BG position for more upside. And looking at our PBR January 115 Calls (PMJ AZ), I would be lying if I didn’t say that I was slightly concerned. But despite today’s weakness, I still like the chart, so let’s bite down hard and hold.

PBR

In terms of tomorrow, we also could have a major over-sold situation in shares of DryShips (DRYS – NASDAQ). As you can see, the stock is quickly approaching a major support point at $70.00, and the last time it touched this level it blasted up to $100 in the blink of an eye.

DRYS

If we see any sort of market bounce, it could be time to add January DRYS calls. The moment it’s time to act, you’ll be the first to know.

Until then,

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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