Major Reversal?

Plus, Add DE Calls

By Bryan Bottarelli
Friday, March 07, 2008 10:42 AM EST
Fri, 7 Mar 2008 15:42:00 GMT

PLAY: Buy more DE April 90 Calls (DE DR) at or under $3.60, good for the day.

Dear Bottarelli Research Member,

How’s that for a reversal?

The pre-market futures were showing a 140-point opening session loss on the Dow. Coming on top of yesterday’s 200-point drop, all signs pointed to a brutal morning. But within 30 minutes of trading, the Dow had recovered all of the early losses and actually traded in the green. Was that just the bottom?

INDU

Before making any rash decisions, I’d like to see how the rest of today’s trading plays out. But one thing I’d like to do here is add to our DE April 90 Calls (DE DR). As I noted when we entered this play, DE has been bouncing above and below its 50-day moving average — similar to a “coiled spring.” Today’s move has once again pushed the shares below the 50-day level, so let’s use this temporary dip to add to lower our cost basis and add to our position now!

DE

PLAY: Buy more DE April 90 Calls (DE DR) at or under $3.60, good for the day. Lower your protective stop limit to $1.80 and re-set your pre-determined “sniper” sell target to $4.70.

At the same time, continue to hold your ABX April 50 Puts (ABX PJ) and your JASO April 15 Calls (QJP DC). And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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