Add JCP Puts

More Pain Ahead

By Bryan Bottarelli
Monday, December 22, 2008 10:12 AM EST
Mon, 22 Dec 2008 15:12:00 GMT

PLAY: Buy the JCP January 20 Puts (JCP MS) at or under $2.40, good for the day. Place a protective stop limit at $1.50 and a pre-determined sniper sell at $3.10.

Dear Bottarelli Research Member,

As we begin a super-short Christmas trading week, I do not expect to make too many plays. With everyone occupied with travel plans and last-minute shopping, I expect some low-volume trading for the next two and a half days. (As a reminder, the financial markets are open a half-day on Wednesday and are closed on Thursday in observation of Christmas.) The markets are indeed open on Friday, but our offices will be closed.

Looking at today’s opportunities, I would like to make one small play on shares of JC Penny (JCP – NYSE).I was at the mall over the weekend, and I must tell you, it wasn’t a pretty sight. Now I admit — shoppers were indeed at the mall. But if you looked closely, you’d see the one true sign: And that is, nobody was carrying around shopping bags. In other words, people are not buying.

JCP

Retailers can pull out all the gimmicks in the world, but it won’t change the situation right now. And this does not bode well for a company that is, in my opinion, one of the worst retailers in the country, JC Penny. Come January, when the major retailers report their Q4 sales numbers, it’ll truly be an ugly sight. And with shares of JCP now failing at their 50-day moving average, I think we’ll see a move back down to $15.00 (or below) over the next week or two. Therefore, let’s make a small play by adding January 20 puts now. Here’s the play:

PLAY: Buy the JCP January 20 Puts (JCP MS) at or under $2.40, good for the day. Place a protective stop limit at $1.50 and a pre-determined sniper sell at $3.10.

At the same time, maintain your AEM January 40 Puts (AEM MH), DUG January 31 Calls (DZG AE), and AMGN January 60 Calls (YAA AL). And if you have yet to take advantage of our special “End of Year” renewal offer, you have one final opportunity. The good news is presented below:

OFFER EXTENDED 12 HOURS: Due to the travel plans of some charter members, I’ve decided to extend our special “End of Year” renewal offer for 12 more hours. That means you have one final opportunity to add 9 months of Bottarelli Research for the lowest price we’ve ever offered.

If you plan on being a part of Bottarelli Research for a long time, then it makes sense for you to lock in this heavily discounted rate right now. Give yourself an early Christmas present, and take this special deal before it expires at midnight tonight! Full details below:

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

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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