Take STP and BNI Profits

Also: Close DIA Puts

By Bryan Bottarelli
Tuesday, November 04, 2008 10:48 AM EST
Tue, 4 Nov 2008 15:48:00 GMT

PLAY: Sell your STP November 20 Calls (STP KD) at or above $2.80, good for the day.

PLAY: Sell your BNI November 90 Calls (BNI KR) at or above $4.00, good for the day.

Dear Bottarelli Research Member,

Happy Election Day.In a display of remarkable strength, the major market averages are extending their gains of last week. As you can see from the Dow chart below, the last six trading days have lifted the Dow from 8,250 up to current levels of 9,500. That’s an average of 200 points higher over the last six days.

DIA

As you know, I’ve been skeptical of this rally, especially since it was sparked by (what I consider) false pretenses early last week. But nevertheless, we cannot fight against the tape. If the markets do reverse course and begin a pullback, we’ll jump back into puts. But if you’re still holding the DIA November 80 Puts (DIJ WB), we have no choice but to close them out now.

*NOTE: These puts did trigger our pre-set stop loss at $1.20, but I’ve stubbornly held onto them. Therefore, this position will be recorded as a loss based on today’s sale prices.

On a more positive note, our two upside calls are making nice advances today. The STP November 20 Calls (STP KD) that we entered yesterday for $2.35 have traded as high as $2.95, good for a quick 25% gainer. And the BNI November 90 Calls (BNI KR) that we entered for $3.40 have traded as high as $4.30, good for a 26% gainer. Let’s go ahead and lock in both profits now!

PLAY: Sell your STP November 20 Calls (STP KD) at or above $2.80, good for the day.

PLAY: Sell your BNI November 90 Calls (BNI KR) at or above $4.00, good for the day.

At the same time, hold your VZ November 32.5 Puts (VZ WZ) in anticipation of a market pullback. And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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