Add BX and CF Puts

Maintain GENZ

By Bryan Bottarelli
Tuesday, September 02, 2008 1:11 PM EDT
Tue, 2 Sep 2008 17:11:00 GMT

PLAY: Buy the BX September 20 Puts (BX UD) at or under $2.55, good for the day. Place a protective stop limit at $1.30 and a pre-determined sniper sell at $4.00.

PLAY: Buy the CF September 135 Puts (CF UV) at or under $5.20, good for the day. Place a protective stop limit at $3.00 and a pre-determined sniper sell at $7.00.

Dear Bottarelli Research Member,

As oil continues to fall, I’d like to complement our GENZ calls with two new downside puts. The first put comes on The Blackstone Group (BX – NYSE) and the second put comes on CF Industries (CF – NYSE).

BX

Starting with BX, the private equity market has absolutely dried up — and this subsequently halts any forward business operations in BX. Acting as a real estate, asset management, and financial advisory firm that specializes in private equity deals, I simply cannot see the stock recovering anytime soon. Combine this bearish thesis with a stock chart that’s experiencing resistance at the 200-day moving average, and I think it’s time to add BX puts to our ledger. Here’s the play:

PLAY: Buy the BX September 20 Puts (BX UD) at or under $2.55, good for the day. Place a protective stop limit at $1.30 and a pre-determined sniper sell at $4.00.

Looking at CF Industries, this company tends to get lumped into the potash plays like MOS, POT, and AGU. But in reality, they’re not as strong. They manufacture and distribute nitrogen and phosphate fertilizers, which are not as “in demand” as their potash-based competitors. Therefore, I feel that CF has more room to fall during an extended commodity-based sell-off. From a chart perspective, it looks like the next move will be down to the 200-day moving average at $125.00. Therefore, let’s play the September 135 Puts now.

CF

PLAY: Buy the CF September 135 Puts (CF UV) at or under $5.20, good for the day. Place a protective stop limit at $3.00 and a pre-determined sniper sell at $7.00.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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