Quickie: Add DXD Calls

Playing An Afternoon Reversal

By Bryan Bottarelli
Friday, November 07, 2008 11:16 AM EST
Fri, 7 Nov 2008 16:16:00 GMT

PLAY: Buy the DXD November 76 Calls (DZS KX) at or under $6.80, good for the day. Place a protective stop limit at $3.40 and a pre-determined sniper sell at $9.60.

Dear Bottarelli Research Member,

200,000 jobs were lost, and yet this news is being met with buying interest. I don’t know about you, but I’m not on board. In fact, a quick look at the Dow chart shows you that today’s upside tick looks like a pin-drop compared to the last two days of selling pressure. And since it’s a low-volume upside move, I don’t think it has the ability to be sustainable. Therefore, going into the close of trading, I’d expect these gains to evaporate.

INDU

To play this reversal, I’d like to once again make a quick trade using DXD calls. As you can see below, the DXD could easily pop back up to the $90.00 level. We have the 50-day moving average as a strong support level, so let’s use this morning’s slight dip as a prime entry opportunity. Let’s add DXD calls now, and if we have a nice 25% to 30% gain going into the close, we’ll lock in the profits. If not, we’ll carry this position into next week. Here’s the play:

DXD

PLAY: Buy the DXD November 76 Calls (DZS KX) at or under $6.80, good for the day. Place a protective stop limit at $3.40 and a pre-determined sniper sell at $9.60.

At the same time, continue to hold your DUG November 41 Straddle. Something’s going to break soon (either up or down) and we want to be positioned to capitalize on it.

DUG

And as always…

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 November 2008