Balance Out With MA Calls

Remain Short DECK & UNP

By Bryan Bottarelli
Tuesday, January 08, 2008 1:44 PM EST
Tue, 8 Jan 2008 18:44:00 GMT

Dear Bottarelli Research Member,

I’d like to even out our ledger by taking another small position — but this one will be biased play to the upside on Mastercard Incorporated (MA – NYSE). As you can see below, MA attempted to penetrate its 50-day moving average yesterday, but the stock made a strong finish and closed back above this support level. Then today, as confirmation, the stock is bouncing off this level, which leads me to believe that MA could move higher over the next day or two. As a result, let’s go ahead and enter a small upside call position in MA and look to take any quick gains off the table.

MA

PLAY: Buy the MA January 210 Calls (MAL AB) at or under $5.00, good for the day. Place a protective stop limit at $3.00.

This will ultimately give us a ledger that is biased 2 to 1 to the downside, which is exactly what we should carry given the current market conditions. Maintain your DECK January 130 Puts (QUK MF) and your UNP January 120 Puts (UNP MD) for more downside. And if you were unable to enter the DECK trade, you might get a second entry opportunity over the next hour.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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