Add TSO Calls

Refiners Rolling

By Bryan Bottarelli
Friday, September 12, 2008 9:53 AM EDT
Fri, 12 Sep 2008 13:53:00 GMT

PLAY: Buy the TSO October 20 Calls (TSO JD) at or under $1.75, good for the day. Place a protective stop limit at $0.80 and a pre-determined sniper sell at $2.40.

Dear Bottarelli Research Member,

Good Friday morning. After yesterday’s unexpected closing-day rally, which pushed the Dow up 170 points in a matter of 30 minutes, it behooves us to continue treading very cautiously in this market.

Our strategy of taking quick-hit winners has worked out nicely, as we’ve hit 10 out of 12 winners here in the month of September (and this figure counts the WYNN trade as a loser, even though some of you were able to lock in a profit).

Looking at today, I don’t want to get too crazy with new positions leading into the weekend. Of course, we’ll continue to take appropriate positions on vehicles like the SDS and DUG when the timing is right, but right now, I feel it’s once again time to enter into a new call play on oil-refiner Tesoro Corporation (TSO – NYSE).

TSO

With oil prices continuing to fall, the gasoline/oil spread is behaving more and more in favor of the refiners. Therefore, I maintain my bullish viewpoint on both TSO and VLO. Looking at TSO’s stock chart today, the 50-day moving average looks to be a level of support, and this indicates higher prices leading into next week. Therefore, let’s get positioned to ride this upside using TSO October calls. Here’s the play:

PLAY: Buy the TSO October 20 Calls (TSO JD) at or under $1.75, good for the day. Place a protective stop limit at $0.80 and a pre-determined sniper sell at $2.40.

And as always.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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