Add BG Calls

Plus: Hold DHI and EXM

By Bryan Bottarelli
Tuesday, August 12, 2008 10:31 AM EDT
Tue, 12 Aug 2008 14:31:00 GMT

PLAY: Buy the BG September 100 Calls (BG IT) at or under $3.40, good for the day. Place a protective stop limit at $2.00 and a pre-determined sniper sell at $4.50.

Dear Bottarelli Research Member,

In today’s first alert, I highlighted shares of Potash of Saskatchewan (POT – NYSE), noting that the agricultural sector has experienced weakness alongside the recent commodity sell-off. But as I reviewed the sector, I feel that an even more powerful play comes to us in the form of Bungee (BG – NYSE).

BG

As you can see from the BG chart, shares appeared to have hammered out a bottom at the $90.00 level, which could ignite an upside move in between the 50-day and the 200-day moving averages around $105.00. And unlike the options string in POT (which is ridiculously expensive), the BG options string offers much more reasonable pricing. For example, the BG September 100 Calls (BG IT) currently trade for $3.40, and they could easily double if BG pops in the manner which I expect. Therefore, let’s go ahead and add these BG calls to our ledger now!

PLAY: Buy the BG September 100 Calls (BG IT) at or under $3.40, good for the day. Place a protective stop limit at $2.00 and a pre-determined sniper sell at $4.50.

At the same time, continue to hold your EXM September 35 Calls (EXM IG) and your DHI September 12.5 Calls (DHI IV). And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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