Play CMI Calls

Plus: Watch RIO and BG

By Bryan Bottarelli
Wednesday, May 28, 2008 2:58 PM EDT
Wed, 28 May 2008 18:58:00 GMT

* PLAY: Buy the CMI June 70 Calls (CDM FN) at or under $3.40, good for the day. Place a protective stop limit at $2.10 and a sniper sell at $4.20.

Dear Bottarelli Research Member,

I tell you what. Throughout the day, I’ve reviewed a good number of very potentially powerful chart formations. Your last alert, which issued three new trades, is testament to that. And since sending that alert, I’ve continued to receive even more strong set-ups, so I’d like to issue one last play for the day on Cummins Engine (CMI – NYSE).

CMI

CMI is a global manufacturer and distributor of diesel and natural gas engines, electric power generation systems, and engine-related components. And as you can see from the chart, a week of downside pressure moved shares of CMI under the $70.00 level. But today the stock is bouncing back strong, and this signals a move back up to the recent high above $73.00. In recent months, CMI has been sort of a forgotten player, but they’re certainly a high-beta stock that should not be taken off the radar screen. If shares can gain upward momentum, we’ll see new 52-week highs in no time. Therefore, let’s get positioned via June calls now!

PLAY: Buy the CMI June 70 Calls (CDM FN) at or under $3.40, good for the day. Place a protective stop limit at $2.10 and a sniper sell at $4.20.

Also showing upward tendencies are Companhia Vale (RIO – NYSE), which is about to bounce off its 50-day moving average (noted below) and Bunge (BG – NYSE), which could easily put in a +$9.00 day like we’ve seen on Cleveland Cliffs (CLF – NYSE).

RIO

As always, I’ll keep these names on my radar screen and alert you to any new trades. And until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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