Add XAU Calls

Play a Metals Bounce

By Bryan Bottarelli
Monday, July 28, 2008 11:08 AM EDT
Mon, 28 Jul 2008 15:08:00 GMT

PLAY: Buy the XAU August 180 Calls (XAV HP) at or under $5.90, good for the day. Place a protective stop limit at $3.10 and a pre-determined sniper sell at $7.50.

Dear Bottarelli Research Member,

If the major market averages are setting themselves up for another downturn (which it looks like they are), then it’s once again time to get some exposure in the precious metals sector. And when it comes to a pure metals basket, nothing is better than the Philly Gold and Silver Index (XAU – PHLX).

XAU

As you can see, this gold and silver play has just touched a near-term bottom at $170 and is now bouncing higher. Any upside momentum could carry the XAU back above the $190.00 level, good for a strong $15.00 to $20.00 rally from current levels. Therefore, let’s play this upside using August calls. Here’s the play:

PLAY: Buy the XAU August 180 Calls (XAV HP) at or under $5.90, good for the day. Place a protective stop limit at $3.10 and a pre-determined sniper sell at $7.50.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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