Take APA Profits

Plus, Add More ABX Calls

By Bryan Bottarelli
Friday, May 02, 2008 9:55 AM EDT
Fri, 2 May 2008 13:55:00 GMT

PLAY: Sell your APA May 125 Calls (APA EV) at or above $5.00, good for the day.

PLAY: Buy more ABX June 42.5 Calls (ABX FV) at or under $1.10, good for the day.

Dear Bottarelli Research Member,

The major market averages are flexing their muscle this morning — with both the Dow and the S&P 500 breaking through their critical technical levels at 13,000 and 1,400. While it’ll be important for both indices to maintain these levels thought the trading session, it’s still a strong showing that the upside from yesterday is getting extended upon today.

INDU

Now, as you might expect, this upside move forced us to close out our SPY May 140 Puts (SFB QJ). If you haven’t already done so, close out this protective put position now. But on the flipside, if you were able to pick up the APA May 125 Calls (APA EV) yesterday for $3.90, this position is looking good. These calls have traded as high as $5.70 today, which shows you that it can jump up rather quickly. Since APA has seen some choppy trading at the open, the price of these calls has been jumping all over the place. Therefore, if you were able to enter then yesterday, let’s go ahead and lock in our profits now!

PLAY: Sell your APA May 125 Calls (APA EV) at or above $5.00, good for the day.

*NOTE: If these calls dip back down under $4.00, I will consider adding them to our ledger for a quick trade once again. But for now, take your overnight 28% return and run!

Also hammering out a near-term bottom (finally!) is Barrick Gold (AMX — NYSE). I know that this position has seen its fair share of ups and downs, but I truly feel that ABX has now hit bottom. Therefore, I’d like to continue taking advantage of our June expiration and buy more ABX June 42.5 Calls (ABX FV). As I write, you can pick up these calls for under $1.10 (bid/ask of $0.90 to $1.00), so let’s go ahead and lower our cost basis on the total position and add to this position now.

ABX

PLAY: Buy more ABX June 42.5 Calls (ABX FV) at or under $1.10, good for the day. Lower your protective stop limit to $0.50 and (for now) maintain your sniper sell at $3.30.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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