Play DE Calls

Playing an Earnings Run-Up

By Bryan Bottarelli
Monday, February 11, 2008 12:52 PM EST
Mon, 11 Feb 2008 17:52:00 GMT

PLAY: Buy the DE March 85 Calls (DE CQ) at or under $5.30, good for the day. Place a protective stop limit at $2.40.

Dear Bottarelli Research Member,

After taking profits on our FLR March 120 calls (FLR CD), I’d like to replace that upside call position with a new trade on John Deere (DE – NYSE). As I mentioned this morning, DE has an earnings call scheduled for Wednesday morning, and this could be the catalyst that pushes shares higher tomorrow. If the numbers come in strong, you should see the entire agricultural sector make a strong upside push, and that would really drive DE’s stock value aggressively higher. Therefore, let’s enter into DE calls now and profit off any pre-earnings run-up. Here’s the play:

DE

PLAY: Buy the DE March 85 Calls (DE CQ) at or under $5.30, good for the day. Place a protective stop limit at $2.40.

Tactical Note: Even though this play is based on Wednesday’s earnings, let’s still use our “sniper” trading approach. In other words, if this play hands you a quick gainer today or tomorrow, lock in the profits. And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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