A Sense of Calm?

Play WFT Calls

By Bryan Bottarelli
Monday, October 20, 2008 10:02 AM EDT
Mon, 20 Oct 2008 14:02:00 GMT

PLAY: Buy the WFT November 15 Calls (WFT KC) at or under $3.10, good for the day. Place a protective stop limit at $1.30 and a pre-determined sniper sell at $5.20

Dear Bottarelli Research Member,

Good morning. As we open today’s trading session, there is a sense of calm in the global markets. For whatever reason, traders and investors alike are collectively feeling like the worst is behind us — and that the actions to avert a financial meltdown are beginning to work. I’m not particularly sure what has caused this sense of calm, but it’s certainly showing up with the Dow’s 150-point advance. I’m not ready to call this the bottom, so we’ll remain quick and nimble with our trading.

INDU

And on that note, we’re seeing a snap-back move in the oil/energy sector, and this presents us with a great opportunity to play November calls on Weatherford International (WFT- NYSE).

WFT

This morning, WFT reported stellar earnings — saying that their third-quarter income rose to $370.6 million ($0.53 a share) versus $292.7 million ($0.42 a share) one year ago. In fact, their revenue set a record at $2.54 billion. Does this sound like a $16.00 stock to you? Heck no! With the stock trading at such low values, let’s add November calls now.

PLAY: Buy the WFT November 15 Calls (WFT KC) at or under $3.10, good for the day. Place a protective stop limit at $1.30 and a pre-determined sniper sell at $5.20.

At the same time, continue to hold your HIG November 30 Puts (HIG WZ). Despite a strong market open, shares of HIG are trading in the red today, which has pushed these contracts up to a high of $6.10. Hold for more gains.

I’ll be out with further updates as the trading day progresses. But until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From October 2008