Play RIG Calls

Maintain WB Puts As Well

By Bryan Bottarelli
Wednesday, August 13, 2008 11:38 AM EDT
Wed, 13 Aug 2008 15:38:00 GMT

PLAY: Buy the RIG September 130 Calls (RIG IF) at or under $7.00, good for the day. Place a protective stop limit at $3.90 and a pre-determined sniper sell at $9.30.

Dear Bottarelli Research Member,

How quickly things change…

After a series of strong sell-offs in the oil, energy, and commodity sector, it appears like these names are on the verge of coming back with a vengeance.

For example, we’ve already locked in strong gains on BG and EXM today, and we’re also showing a nice profit on our Wachovia (WB – NYSE) puts as well.

WB

So as the banking sector gets up for another downside move, I’d like to enter into a new upside call play in the oil sector. And today’s candidate comes in the form of Transocean (RIG – NYSE).

RIG

As you can see, the world’s top deep-water driller has sold off lately, but today’s upside tick signals a possible rally up to the levels in between the 50-day and 200-day moving averages. That could equate to a quick $10.00 to $15.00 upside move, so let’s play this pop using September calls. Here’s the play:

PLAY: Buy the RIG September 130 Calls (RIG IF) at or under $7.00, good for the day. Place a protective stop limit at $3.90 and a pre-determined sniper sell at $9.30.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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