Add FCX Calls

Playing an Extended Metals Rally

By Bryan Bottarelli
Monday, November 24, 2008 11:44 AM EST
Mon, 24 Nov 2008 16:44:00 GMT

PLAY: Buy the FCX January 22.5 Calls (FCX AX) at or under $4.10, good for the day. Place a protective stop limit at $2.00 and also set a pre-determined sniper sell at $6.00.

Dear Bottarelli Research Member,

I don’t know about you, but I’m becoming increasingly concerned about the continuous bailouts that are occurring with such a startling level of regularity. Today’s newest $20 billion cash infusion in Citigroup is just another example of the “blank check” mentality that Washington is now offering to Wall Street. It’s hard to fathom where all this money is coming from. In fact, the recent issue of Barron’s calles it “The Fed’s Scary, Amazing, Expanding Balance Sheet,” and I think that description is right on the money. As the money continues to flow, I think this paints a very strong picture for every precious metal. Therefore, I’d like to enter into a new upside call position on Freeport-McMoRan Copper & Gold (FCX – NYSE).

FCX

FCX is one of the best all-around metals plays you can buy, with exposure to copper, gold, molybdenum, and silver prospects in Indonesia, North America, South America, and Africa. As you can see from the chart, the stock has dipped to incredibly low levels, and today’s pop could be the early indication of a powerful upside move. In fact, the stock could easily double and still be under-valued. As more and more investors become concerned about the non-stop bailouts, I think metals prices will keep moving upwards. Therefore, let’s capitalize on this move by playing FCX calls into January. Here’s the play…

PLAY: Buy the FCX January 22.5 Calls (FCX AX) at or under $4.10, good for the day. Place a protective stop limit at $2.00 and also set a pre-determined sniper sell at $6.00.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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