Once Again, Add WB Puts

Second Time a Charm?

By Bryan Bottarelli
Tuesday, August 12, 2008 3:38 PM EDT
Tue, 12 Aug 2008 19:38:00 GMT

PLAY: Buy the WB September 16 Puts (WB UH) at or under $2.30, good for the day. Place a protective stop limit at $1.20 and a pre-determined sniper sell at $3.20.

Dear Bottarelli Research Member,

Sometimes, I want to grab this market by the neck and shake violently. Case in point, our recent trade on the Wachovia August 19 Puts (WB TV). As you can see by the WB chart today, we had the directional move spot on. Yet choppy trading conditions forced us to close off the position yesterday.

WB

Now, if you’re still holding your WB puts, then congratulations on your intestinal fortitude. Since my directional bias on the stock has not changed, you’re well on your way to achieving a strong profit. If you closed out your August put position, I’d like to re-establish a new downside put play going out until September. After all, WB’s failure underneath the 50-day moving average signals another move down below $12.50. And I want to profit off this decline. So here’s the trade:

PLAY: Buy the WB September 16 Puts (WB UH) at or under $2.30, good for the day. Place a protective stop limit at $1.20 and a pre-determined sniper sell at $3.20.

Also, today’s down move has stopped us out of our DHI September 12.5 Calls (DHI IV), so this position is now closed.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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