Add WYNN Puts

Maintain TSO Too

By Bryan Bottarelli
Friday, September 05, 2008 10:30 AM EDT
Fri, 5 Sep 2008 14:30:00 GMT

PLAY: Buy the WYNN September 85 Puts (UWY UQ) at or under $3.90, good for the day. Place a protective stop limit at $2.00 and a pre-determined sniper sell at $6.00.

Dear Bottarelli Research Member,

The downside continues.

In yesterday’s alert, I noted that there are no “safe haven” investments — as every sector on my screen was down across the board.

As a continuation of this theme, I can now say that there are no “safe haven” investments available in the global marketplace. Virtually every international index is trading deeply in the red as well.

In fact, shares of Exxon Mobil (XOM – NYSE), who have been reporting quarterly profits that have exceeded anything they’ve ever made in their illustrious history, have just hit a new 52-week low. Quite simply, the selling has been brutal. Absolutely brutal.

XOM

Faced with a situation like this, we have no choice but to continue adding a series of put options — and use any weakness to lock in quick winners. So in this spirit, we have a downside opportunity in shares of Wynn Resorts (WYNN – NASDAQ).

WYNN

As you can see, the stock has just dipped under the 50-day moving average, which could be the early indication that $20.00 worth of downside could be on the horizon. Let’s profit off this downside using September 85 puts. Here’s the play:

PLAY: Buy the WYNN September 85 Puts (UWY UQ) at or under $3.90, good for the day. Place a protective stop limit at $2.00 and a pre-determined sniper sell at $6.00.

At the same time, continue to hold your TSO October 20 Calls (TSO JD). Since these are October contracts, we have more time to let the upside move play out. Plus, the recent market selling pressure is so intense it’s taking everything down with it. TSO should find support at its 50-day moving average, so maintain these calls.

TSO

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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