Take WB Profits!

Hold FCL and UNP

By Bryan Bottarelli
Tuesday, August 19, 2008 9:47 AM EDT
Tue, 19 Aug 2008 13:47:00 GMT

PLAY: Sell your WB September 16 Puts (WB UH) at or above $2.50, good for the day.

Dear Bottarelli Research Member,

Yesterday morning, we discussed the current status of the Dow chart — noting that a possible upside breakout above the 50-day moving average could signal a new trend.

On the same hand, we also noted that a failure at this level would follow the current pattern. And as it turned out, a failure is exactly what happened by the day’s end.

INDU

Now this morning, the Dow has once again opened lower — but I happen to think that this morning’s selling pressure will be short lived. After all, a quick look at the chart below shows a series of higher lows that have been set since mid-July. If this pattern continues, I would expect to see prices stabilize at current levels, and I wouldn’t be surprised to see today’s markets close in the green.

In response to this move, we’re holding FCL September 60 Calls (FCL IL) and UNP September 75 Calls (UNP IO). Maintain each position for further upside.

On the downside, we’re holding WB September 16 Puts (WB UH), which we entered on August 14th for $2.05 per contract. Although the WB news (and the stock chart) keeps getting worse — the stock has yet to make the strong downside push that I’ve expected. Rather, the stock has “drifted” lower. On the plus side, this slow drift has pushed our puts up to a high of $2.50 per contract, good for a 21.9% gainer. I’d like to lock in these gains now, and we can always re-enter this position at a later date. Lock in gains now!

WB

PLAY: Sell your WB September 16 Puts (WB UH) at or above $2.50, good for the day.

Should any other play opportunities come up, you’ll be the first to know. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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