Position Update

Hold DO, Close PTR and NILE

By Bryan Bottarelli
Wednesday, February 27, 2008 10:00 AM EST
Wed, 27 Feb 2008 15:00:00 GMT

Dear Bottarelli Research Member,

As you can probably tell from this week’s alerts, I’m very skeptical of the market’s recent upside action. Any call plays that we’ve made, for example, have increased at a strong intra-day rate. And therefore, we’ve been able to execute a very fast turnaround by taking our quick “sniper” profits off the table. In a market environment like this, where the directional bias seems to change every hour, this is the only smart way to approach things. Now don’t get me wrong, I would love to let a few trades run over a 3-4 day time period. But in a market like this, it just isn’t possible. Therefore, we’ll continue to make quick-hit trades until I see signs that the intra-day volatility is settling down.

Now, in terms of our open put positions, I think we need to re-adjust our strategy. For example, while Blue Nile (NILE – NASDAQ) and PetroChina (PTR – NYSE) did not actively engage in the market’s latest upside push, they also did not extend upon their bearish chart formations. And even while PTR was dropping over $4.00 yesterday, our puts couldn’t move above the $6.00 price that we paid to enter. Therefore, I think it’s time that we let each position go and we’ll look to enter puts that correspond more appropriately with the overall market direction. Case in point, the market gapped down on the open, yet NILE and PTR each traded higher. In a situation like this, I need to see these stocks falling on a weak market open — and if that’s not going to be the case — then we need to move. If you’re still holding onto the PTR March 140 Puts (PTR OH) or the NILE March 40 Puts (JWU OH), let’s go ahead and close out each position now.

PTR

On the flipside, the oil service stocks continue to appear strong, so let’s continue to hold our DO March 130 Calls (DO CF). We came a mere $0.05 away from locking in yet another sniper profit in yesterday’s action, so maintain these calls with a sniper sell trigger at $3.00.

DO

I expect to be out with further updates and trades as the day progressed, but until then:

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From February 2008