Addressing SPWR

Playing Calls Into Earnings

By Bryan Bottarelli
Tuesday, April 15, 2008 2:28 PM EDT
Tue, 15 Apr 2008 18:28:00 GMT

PLAY: Sniper Sell HALF of your SPWR May 100 Calls (QSU ET) at $5.40, good for the week. Hold remaining half into Thursday’s earnings announcement.

Dear Bottarelli Research Member,

It’s been another relatively slow trading session filled with small and insignificant moves. Therefore, let’s maintain all of our current positions — making sure that we lock in profits the moment our pre-determined sniper sell levels trigger.

Now while we have a moment, I’d like to formulate a strategyfor SunPower Corporation (SPWR – NASDAQ) leading into their earnings report scheduled for Thursday, April 17th at 1:30 pm EST. As you can see from the chart below, SPWR is trying very hard to establish a strong support level at its 200-day moving average. If investors embrace SPWR’s earnings report on Thursday, then this will be the catalyst that moves shares aggressively higher.

SPWR

Just how high could SPWR go? Look no further than competing solar firm First Solar (FSLR – NASDAQ).As you can see below, FSLR is a full $100.00 above its 200-day moving average and looking to break a new high as we speak. Of course, FSLR is the darling of the solar group, but this just goes to show you the explosive upside potential of a competing solar stock like SPWR.

FSLR

Therefore, when it comes to outlining a tactical strategy for our SPWR May 100 Calls (QSU ET), here’s what I’d like to do. Leading up to Thursday’s earnings report, we could see shares move higher. If any forthcoming SPWR increase pushes your calls up to $5.40, that would represent a 20% gain from our $4.50 entry price. At this point, let’s go ahead and lock in HALF of our profits. Then, with a 20% gain in hand, hold the remaining half of the position for a potentially strong earnings report on Thursday.

PLAY: Sniper Sell HALF of your SPWR May 100 Calls (QSU ET) at $5.40, good for the week. Hold remaining half into Thursday’s earnings announcement.

I’m outlining this tactical strategy right now because I will be traveling on business tomorrow and Thursday — and thus away from my command station. Therefore, there will be no alerts on Wednesday or Thursday. But I’d still like to leave you with pre-determined exit strategies for all of our open positions — so you don’t miss any profit-taking opportunities over the next two days. For a complete review of all of our positions, refer to the “Position Review” alert from earlier this morning. And once you add this new SPWR strategy into the mix, we’re completely covered for the next two days. So unless something triggers before the close of today’s trading, I’ll be back with you on Friday. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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