Add KSS Puts, AMGN Calls

Plus: Maintain MOS and AZO

By Bryan Bottarelli
Thursday, December 11, 2008 10:35 AM EST
Thu, 11 Dec 2008 15:35:00 GMT

PLAY: Buy the KSS January 35 Puts (KSS MG) at or under $3.20, good for the day. Place a protective stop limit at $1.80 and set a pre-determined sniper sell at $4.10.

PLAY: Buy the AMGN January 60 Calls (YAA AL) at or under $2.60, good for the day. Place a protective stop limit at $1.40 and set a pre-determined sniper sell at $4.00.

Dear Bottarelli Research Member,

Good morning.As you can see from the Dow chart below, the major market averages are continuing their indecisiveness right below the 50-day moving average. It seems like the bulls are simply waiting for any news item that they can use as an excuse to push above this level. And for whatever reason, the bears are allowing them to sit around and wait for this catalyst without suffering any losses. Therefore, we’re left in a holding pattern leading up to the next major directional move.

INDU

Because of this, we’re currently holding one call and one put position. As you know, we entered the MOS January 35 Calls (MOS AG) yesterday for $4.20, and they’ve traded as high as $5.00 in today’s session, good for a quick 19% gainer. Maintain these calls for more upside.

At the same time, we’re also holding AZO January 120 Puts (AZO MD), which will hand us a profit as AZO moves lower after setting a double-top chart formation at the $130 level. Maintain these puts for more upside as well.

In addition to these two positions, I’d also like to add a new round of puts on Kohls (KSS – NYSE). As you can see from the chart, KSS is running sideways right around the $36.50 level. The last time it exhibited such a sideways trading pattern was back in early November, when it traded horizontal for seven straight days before falling $10.00 over the next eight sessions. As I look at the KSS chart today, I think the stock is setting itself up for a similar downside move. Therefore, let’s profit off this move by adding January puts.

KSS

PLAY: Buy the KSS January 35 Puts (KSS MG) at or under $3.20, good for the day. Place a protective stop limit at $1.80 and set a pre-determined sniper sell at $4.10.

Also, I’d like to add upside calls on biotech giant Amgen (AMGN – NASDAQ). Going into 2009, I feel that the biotech sector will be the top market performer. My rationale for this viewpoint is both political and economical. You see, healthcare-related companies can withstand recessionary environments, especially with new governmental leaders that favor emerging biotech companies over the price-gouging Big Pharma names. Therefore, I think shares of AMGN will rally into 2009. Let’s profit off this move using January calls.

AMGN

PLAY: Buy the AMGN January 60 Calls (YAA AL) at or under $2.60, good for the day. Place a protective stop limit at $1.40 and a pre-determined sniper sell at $4.00.

And as a final note, if you have yet to take advantage of our special “End of Year” renewal offer, the time to act is now! Details below:

SPECIAL “END OF YEAR” RENEWAL OFFER: As we head into 2009, I want to ensure that you maintain your space in our elite group of traders. That’s why I’m offering you the opportunity to add 9 months onto your membership for the lowest price we’ve ever offered in the history of Bottarelli Research. This special offer expires on Friday, December 19th, so please don’t miss out. Give yourself an early Christmas present and lock in this discounted membership offer now!

https://www.bottarelliresearch.com/renew/?service=opt&offer=312SDD28I6

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 December 2008