Add AEM Calls

More Gold Protection

By Bryan Bottarelli
Tuesday, October 07, 2008 2:40 PM EDT
Tue, 7 Oct 2008 18:40:00 GMT

PLAY: Buy the AEM October 45 Calls (AEM JI) at or under $4.90, good for the day. Place a protective stop limit at $2.10 and a pre-determined sniper sell at $6.80.

Dear Bottarelli Research Member,

The beat goes on…

Once again, we have another day of selling pressure, as I indicated this morning.

The Wall Street Journal is reporting that Britain is finalizing an $80 billion bank rescue package. And what’s worse, Ben Bernanke opened his big yapper with hints about another rate cut — noting that growing downside risk is the Fed’s first priority — resulting in the markets losing even more. (Gee thanks Fed. Where the *&^% were you guys 12 months ago!?!?)

The more news I see, the more I want to be positioned in the one and only safe haven available today — and that’s gold. But instead of playing names like SPDR Gold Shares (GLD – NYSE) or Barrick Gold (ABX – NYSE), I’ve discovered an even more powerful play in the form of Agnico-Eagle Mines (AEM – NYSE).

AEM

This major gold company manages exploration in 80 properties in central and eastern Canada, 7 properties in the United States, 2 properties in Finland, and 2 properties in Mexico. And as you can see from the AEM chart, we have a possible triple bottom formation right at the $45.00 level. So enough talk, let’s add AEM calls now!

PLAY: Buy the AEM October 45 Calls (AEM JI) at or under $4.90, good for the day. Place a protective stop limit at $2.10 and a pre-determined sniper sell at $6.80.

At the same time, continue holding your UYG November 13 Calls (UUF KO). As I mentioned, this is going to be a very speculative play. But all it’ll take is one powerful upside move in the financial sector to push this play aggressively higher. Therefore, maintain your UYG calls. And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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