Add DUG Calls

Playing the 8,000 Re-Test

By Bryan Bottarelli
Monday, December 01, 2008 9:49 AM EST
Mon, 1 Dec 2008 14:49:00 GMT

PLAY: Buy the DUG December 34 Calls (DZG LH) at or under $3.60, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $5.30

Dear Bottarelli Research Member,

Welcome back! I hope you had an enjoyable and relaxing Thanksgiving holiday — but now it’s back to business.

In the week leading up to Thanksgiving, I urged you to maintain an upside bias. And as it turned out, the major market averages put in their best 5-day trading period since 1933. So far, so good. The second part of my thesis included the major market averages giving back these gains this week, and thus far, this market move is playing out exactly as predicted. As I write, the Dow is down 274, and it looks like we’ll dip under 8,000 once again.

INDU

Luckily on Friday, our MON December 75 Calls (MON LO) hit our pre-determined sell order at $7.00, so this locked in another nice 20.69% gainer. This leaves us holding the second half of our QLD December 22 Straddle, which is the QLD December 22 Puts (QLA XV). As you can imagine, we’re hoping for a downside market move to achieve a profit on these puts, and so far we’re getting exactly that. Continue to hold these puts for more downside market action.

In terms of new plays, I think it’s time to move on the US Oil & Gas ProShares (DUG – AMEX).As you can see, this ultra-short play has dipped down to the $30.00 level, which is something we haven’t seen since June and July. And in the months that followed, DUG popped all the way up to $85.00. We certainly don’t need this type of drastic move to make a quick profit. All we need is one or two days of selling pressure, and we’ll see a nice little return. Therefore, let’s add DUG calls now!

DUG

PLAY: Buy the DUG December 34 Calls (DZG LH) at or under $3.60, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $5.30.

I’ll follow up later in the day with more updates. 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 December 2008