Enter ABX Calls

Play Another Quick Move

By Bryan Bottarelli
Wednesday, April 02, 2008 1:43 PM EDT
Wed, 2 Apr 2008 17:43:00 GMT

PLAY: Buy the ABX May 40 Calls (ABX EI) at or under $2.50, good for the day.

Dear Bottarelli Research Member,

Following Ben Bernanke’s testimony, stocks remain mixed. And to be honest, I think this paints a nice picture for the bulls. After all, the inability of the bears to gain back some of yesterday’s strong up-move shows that we could have seen the market’s near-term bottom. Therefore, I’d like to enter yet another play that’ll capitalize on a company that’s gotten dramatically over-sold, and that company is Barrick Gold (ABX – NYSE).

ABX

As you know, we’ve done quite well playing ABX both up and down in the month of March. On March 4th, for example, we made 26.92% on ABX April 50 Puts (ABX PJ). And then on March 26th we made 28.21% on ABX April 45 Calls (ABX DI).

Now that gold prices have fallen over 10% in the last 10 trading sessions, we once again have an a situation where ABX shares have followed gold lower — and in the process have become over-sold as well. But as you can see from the ABX chart, shares are currently making a strong bounce right off the 200-day moving average, and this presents us with a really nice opportunity to make a quick return playing calls on ABX. So let’s get positioned now!

PLAY: Buy the ABX May 40 Calls (ABX EI) at or under $2.50, good for the day. Place a protective stop limit at $1.40 and a “sniper sell” order at $3.10.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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