Add CLHB Calls

Sniper Sell a Quick Update Move

By Bryan Bottarelli
Monday, March 17, 2008 3:08 PM EDT
Mon, 17 Mar 2008 19:08:00 GMT

PLAY: Buy the CLHB April 65 Calls (QPB DM) at or under $3.70, good for the day.

Dear Bottarelli Research Member,

With less than one hour left in the trading session, I am still shocked that the major market averages have held up throughout the day. Despite a laundry list of stocks getting absolutely pummeled today (with names like ICE, FLR, CME, GS, and FWLT all off at least 7% on the session), it seems to me like these losses are not being reflected in the major market averages. Therefore, I still think it’s smart to maintain a position in our DIA April 114 Puts (DIA PJ).We all know that the Fed gives their next interest rate decision tomorrow afternoon, and to my eye, today’s action has now priced in a full 1-point cut. If the Fed does not cut interest rates by a full point tomorrow, I suspect that the markets will be disappointed and we’ll see another sell-off.

Another interesting point is that Secretary Paulson just spoke after meeting with the “working group.” As I’ve reported before, this “working group” is a code name for the Plunge Protection Team, and I wouldn’t put it past them to have concocted another way to avert a market collapse. For that very reason, I’d like to take a very small position in a stock that’s been remarkable strong all day today — just to own some level of upside exposure. And that company comes in the form of Clean Harbors (CLHB – NASDAQ).

CLHB

CLHB provides environmental services in North America — including the transportation, collection, treatment, and disposal of hazardous and non-hazardous wastes. They also offer fuel blending, landfill disposal, and wastewater treatment. As you can see from the chart above, the stock has put in a very strong upside tick today, and this represents one of the best ways I see to get positioned for any upside stock market move. Not many traders follow CLHB, which means that the April options string represents a good value at these levels. Based on these cheap calls and strong chart formation, let’s add a small position in CLHB April calls now!

PLAY: Buy the CLHB April 65 Calls (QPB DM) at or under $3.70, good for the day. Place a sniper sell target at $4.30 and a protective stop limit at $2.10.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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