Weakness Right Out of the Gate

EOG Triggers $3.50, Watch for Buyers

By Bryan Bottarelli
Friday, May 09, 2008 9:53 AM EDT
Fri, 9 May 2008 13:53:00 GMT

Dear Bottarelli Research Member,

We’re opening the day with a substantial drop in the major market averages, as the Dow has dipped below 12,750 and now stands at the exact mid-point of its 50-day and its 200-day moving average.

INDU

Based on such a dramatic downside move, it’ll be interesting to see whether or not any buyers will step in throughout the day. I personally feel that any mid-morning weakness could present another strong timing entry price on a call play (similar to EOG and WFT from yesterday), so I’ll continue to monitor the action and present you with any trades that look primed and ready for a quick pop. A company like Foundation Coal (FCL – NYSE) could be one example of a stock setting up for a run at its recent high, so if the conditions are right, I’ll certainly issue the trade.

FCL

And speaking of EOG, shares have once again hit a new 52-week high this morning, and this upside move offered you a second opportunity to exit your EOG May 140 Calls (EOG EU). If you were not able to get your $3.50 sale price triggered yesterday, then hopefully you locked in your profits this morning.

We also had a nice opening-session pop in shares of ABX, and this has finally pushed our ABX June 42.5 Calls (ABX FV) into profitability. With an average entry price of $1.52, today’s high of $1.75 represents a 15% gain, but since hitting those high levels, ABX shares have moved back down. Therefore, let’s continue to hold this position. And until further notice,

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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