Speculators: Add DRYS

Play More DRYS June 95 Calls (DQR FS)

By Bryan Bottarelli
Tuesday, May 27, 2008 11:24 AM EDT
Tue, 27 May 2008 15:24:00 GMT

SPECULATIVE PLAY: Buy more DRYS June 95 Calls (DQR FS) at or under $3.50, good for the day. Lower your protective stop limit to $1.40.

Dear Bottarelli Research Member,

Last Friday, I issued a speculative trade on the DRYS June 95 Calls (DQR FS). The play was based on the strength of the entire Transport sector, combined with a dramatic sell-off in the Baltic Dry Index. As one of the leading dry-bulk shipping companies in the world, Dryships (DRYS – NASDAQ) represents one of the best plays you can make on the ever-increasing need for global commodities — and as you can see from the chart below — shares have sustained a substantial haircut over the last six (6) trading sessions. In fact, shares have fallen from $115.00 down to $85.00. This puts DRYS stock within $5.00 of an extremely strong support level at the crossing of the 50-day and the 200-day moving averages at $80.00.

DRYS

Therefore, I’d like to add more of this position to our ledger, using $80.00 as a strong level of support for DRYS. As we’ve seen before, DRYS has the ability to make very large price moves, so if we can time it correctly, any forthcoming pop could hand us a nice return. Therefore, let’s use today’s extended sell-off to add to our June call position.

SPECULATIVE PLAY: Buy more DRYS June 95 Calls (DQR FS) at or under $3.50, good for the day. Lower your protective stop limit to $1.40.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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