Add LEAP Puts

Balance Out Ledger

By Bryan Bottarelli
Thursday, April 10, 2008 10:06 AM EDT
Thu, 10 Apr 2008 14:06:00 GMT

PLAY: Buy the LEAP May 50 Puts (UAO EJ) at or under $5.20, good for the day. Place a pre-determined sniper sell at $6.20 and a protective stop limit at $3.10.

Dear Bottarelli Research Member,

We’re once again opening up to a market that’s slowly drifting lower. As you can see from the Dow chart below, we’re now in the 7th day of the “coiled spring” trading pattern — and to be honest — this could last all the way down to the 50-day moving average around 12,375.

INDU

So while we have a moment, I’d like to enter a new put trade on a stock that’s looking rather weak — and that company is Leap Wireless (LEAP – NASDAQ).

LEAP

LEAP offers service to 2.9 million customers in 23 states under the “Cricket” and “Jump” brand names. I’ve personally never used LEAP Wireless service, but a look at the LEAP chart clearly shows an engulfing bearish candlestick formation yesterday — followed by a lower tick today. If this bearish formation holds true, LEAP could move back down to its 50-day moving average at $42.50. That’s a $6.50 down-move from current levels, so let’s enter May puts to profit off this downside move now!

PLAY: Buy the LEAP May 50 Puts (UAO EJ) at or under $5.20, good for the day. Place a pre-determined sniper sell at $6.20 and a protective stop limit at $3.10.

At the same time, continue holding your CHK May 47.5 Calls (CHK ES).

And as always.

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 April 2008