Add ABX Calls

Will Investors Once Again Seek Protection in Gold?

By Bryan Bottarelli
Monday, April 14, 2008 1:50 PM EDT
Mon, 14 Apr 2008 17:50:00 GMT

PLAY: Buy the ABX May 40 Calls (ABX EH) at or under $4.50, good for the day.

Dear Bottarelli Research Member,

We’re approaching the end of the lunchtime trading hour, and yet the markets still remain mired in indecision and inconclusive trading patterns. For traders like us, moments like this exemplify why it’s important to maintain positions on each side of the ledger (via calls and puts). But at the same time, moments of indecision like this also support taking an upside position in gold. After all, gold is the classic “safe haven” investment, and in times like this, I would expect to see another rush into gold on any forthcoming market volatility. Further strengthening our case is the fact that Barrick Gold (ABX – NYSE) just tapped the 200-day moving average and is just now starting to inch higher. Take a look:

ABX

Based on the inconclusive market conditions and a 200-day support level, let’s go ahead and add ABX May calls to our trading ledger now! Here’s the play:

PLAY: Buy the ABX May 40 Calls (ABX EH) at or under $4.50, good for the day. Place a protective stop limit at $2.90 and a pre-determined sniper sell order at $5.50.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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