Play DHI Calls

Coming Housing Breakout?

By Bryan Bottarelli
Monday, August 11, 2008 1:46 PM EDT
Mon, 11 Aug 2008 17:46:00 GMT

PLAY: Buy the DHI September 12.5 Calls (DHI IV) at or under $1.60, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $2.50.

Dear Bottarelli Research Member,

The continuation trend continues…

That is, the sell-off in oil/energy has sparked even more money flow back into financials and housing. Therefore, I’d like to carefully play this fund shift using DR Horton (DHI – NYSE).

DHI

As you can see below, the U.S. homebuilder is on the verge of an upside breakout above its 200-day moving average. If this occurs, we could have a powerful opportunity to make a strong return using DHI September calls. Therefore, as the oil transfer continues, let’s make a quick momentum play using DHI calls now.

PLAY: Buy the DHI September 12.5 Calls (DHI IV) at or under $1.60, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $2.50.

At the same time, continue to hold your EXM September 35 Calls (EXM IG).The stock has continued its upside move for most of the session, so let’s hold for more gains. And just to follow-up, our WB August 19 Puts (WB TV) triggered a stop this morning, so if you haven’t already done so, close this position off.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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