Position Update

Maintain Everything

By Bryan Bottarelli
Tuesday, August 26, 2008 2:39 PM EDT
Tue, 26 Aug 2008 18:39:00 GMT

Dear Bottarelli Research Member,

It’s been a rather uneventful day of trading — both for the major market averages and also for our current positions.

As you can see from the Dow chart below, the Blue Chips have spent most of the day locked in a tight trading range without any major upside or downside movement. Stagnant action like this confirms the trading tactic of maintaining an equally weighted ledger of both calls and puts. As we wait for more of a directional move, let’s take a moment and review our current ledger.

INDU

On the call side, I’d like to maintain both our MOS September 110 Calls (MOS IY) and our CSIQ September 35 Calls (GQA IG). As you can see below, both stocks could be in the verge of powerful upside breakouts above their respective moving averages (the 50-day for CSIQ and the 200-day for MOS). And as we’ve seen before, it doesn’t take much for both stocks to move aggressively higher, so continue holding both calls.

MOS

CSIQ

Over on the put side, all three charts continue to give off bearish signals. Looking first at Sears Holdings (SHLD – NASDAQ), the stock needs to re-test the $80.00 level before moving any higher. Therefore, maintain your SHLD September 85 Puts (KTQ UQ).

SHLD

The same goes for Wachovia (WB – NYSE). Since the troubled financial cannot penetrate the 50-day moving average, this points to continued share price deterioration. Hold your WB September 15 Puts (WB UC) for more gains.

WB

And finally, our more speculative downside play on Arch Coal (ACI – NYSE) did move in our direction yesterday, but I think we can squeeze more profit out of this play in the days that follow. Therefore, maintain your ACI September 55 Puts (ACI UK) for more upside as well.

ACI

When it comes time to lock in profits on any of these positions, you’ll be the first to know. But until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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