In Play: Yet Another Fade

Hold LVS and NILE: Close UNP

By Bryan Bottarelli
Tuesday, February 19, 2008 3:28 PM EST
Tue, 19 Feb 2008 20:28:00 GMT

Dear Bottarelli Research Member,

As we expected, the market’s gains have once again faded away into a sea of red — proving that the bulls just don’t have the strength to sustain a rally. Looking at today’s updated Dow chart, things really do not look good going into tomorrow. The good news is that we’re properly positioned via puts to profit off any forthcoming downside action. Therefore, maintain your LVS March 85 Puts (LVS OQ), and I’ll go ahead and use a $2.80 entry price on our NILE March 40 Puts (JWU OH) as well. Both stock charts point to further weakness on the horizon.

INDU

On the not-so-fortunate side, the play that was supposed to hand us a profit off today’s early gains did not to its job. For reasons unclear to me, shares of Union Pacific (UNP – NYSE) could not rally off their 50-day moving average, and this pushed the stock lower despite strong market gains. As a result, our UNP March 130 Calls (UNP CF) have been stopped out. In retrospect, our strategy was correct, but UNP just didn’t extend upon the gains the way I envisioned. Therefore, we have no choice but to call this position closed.

Until tomorrow,

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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