Afternoon Update
Maintain All Positions
Dear Bottarelli Research Member,
As the markets were pushing higher this morning, I was getting ready to lock in profits on our LVS February 7.5 Calls (LJJ BU). But as the morning trading day progressed, LVS quickly reversed course and moved lower. Going into the day, I wanted to take at least 30% profits on this one, but the very best we could have locked in was a 28% gainer when our calls hit $2.50. As a result, let’s maintain this position. After all, we have time on our side. Plus, LVS has the ability to make very large intra-day price moves. Combine these two factors with the super-cheap cost of carry, and let’s continue holding these calls for more upside.
At the same time, let’s continue holding our KSS January 40 Puts (KSS MH), JASO February 5 Calls (QJP BA), and AZO January 135 Puts (AZO MG). In a choppy session, all of these positions have been bouncing around today, but from a chart perspective, I still like the upside and downside bias on every one of them. Triple-tops on both AZO and KSS indicate further downside action, while JASO’s powerful breakout above the 50-day moving average continues to offer us a powerful (and cheap) upside play, especially leading into the “inauguration catalyst” on January 20th.
In some other interesting news, shares of Intercontinental Exchange (ICE – NYSE) have gotten clobbered over the last two days, sparked by a downgrade to “neutral” from Goldman. From a chart perspective, $50.00 is a very solid floor. But to be honest with you, adding upside exposure anywhere under $60.00 looks like a nice play. If shares continue to move south, I may pick up some calls on the cheap. Stay tuned.
I’m sure I’ll be out later in the session with further updates. Until then,
Lock and load!
Sincerely,
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