Add LVS Puts

Play a Swing Down

By Bryan Bottarelli
Monday, June 02, 2008 12:51 PM EDT
Mon, 2 Jun 2008 16:51:00 GMT

PLAY: Buy the LVS June 65 Puts (LVS RM) at or under $2.50, good for the day.

Dear Bottarelli Research Member,

Over the last hour, things have gotten bad to worse.

The Dow has extended upon its losses to reach -200 points, which now means that the Blue Chips are threatening to break blow the near-term bottom set last week. See for yourself:

INDU

Luckily, our DE June 80 Calls (DE FP), PBR June 70 Calls (PMJ FN), CMI June 70 Calls (CDM FN), and PTEN June 35 Calls (NZQ FG) have all done a remarkable job of “holding their water” in the midst of the selling pressure. But despite this resistance, we must add some level of downside protection now (this is the move that I attempted to protect against using the SPY puts from last week, but in retrospect, that move came two days too early). But today, it appears like we need to re-establish a protective downside position — and today’s candidate comes in the form of Las Vegas Sands (LVS – NYSE).

LVS

As you can see from the chart, LVS has been stuck in a well-established downtrend, which distinct failures at the 50-day moving average over the last five months. Today, an attempt to re-test this 50-day level is getting wiped out, and this offers a signal that we’ll soon see prices re-test the previous lows under $65.00. Based on this view, let’s go ahead and establish a put position in LVS now.

PLAY: Buy the LVS June 65 Puts (LVS RM) at or under $2.50, good for the day. Place a protective stop limit at $1.25 and a pre-determined sniper sell at $3.20.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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