Revisiting ABX

Plus: PTEN, CLF & WFT

By Bryan Bottarelli
Wednesday, May 21, 2008 10:26 AM EDT
Wed, 21 May 2008 14:26:00 GMT

Dear Bottarelli Research Member,

I’ve been receiving a number of emails from members who are still holding the June call position in Barrick Gold (ABX – NYSE). As you know, I had been adding to our ABX June 42.5 Calls (ABX FV) in anticipation of a coming stock price recovery. After all, I noted on numerous occasions that ABX was grossly oversold, and that’s why I kept adding to the position (which lowered our total cost basis to $1.52). But when these calls dipped to $0.90 on May 13th, I became inpatient and closed our the position for good. In retrospect, this was a knee-jerk reaction on my part. After all, just look at shares of ABX today!

ABX

As I write, these calls have traded as high as $2.35, good for a 54% gain above our $1.52 average entry price. Therefore, this goes without saying: If you’re still holding these calls, lock in your profits now! (and congrats on your patience with this one, great trade!)

In terms of our other positions, I want to continue maintaining the PTEN June 35 Calls (NZQ FG), CLF June 100 Calls (CGJ FT), and WFT June 90 Calls (WFT FR). After the market’s 200-point sell-off from yesterday, we’re still in the process of sorting things out this morning. But as we lead into the close of the week, I feel that all three positions will put us in position for really nice profits — so maintain all three positions for future gains. And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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