Add BG Puts
Play A $10.00 Downside Move
PLAY: Buy the BG January 50 Puts (BGW MJ) at or under $3.60, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $5.20.
Dear Bottarelli Research Member,
Good morning.Looking at today’s Dow chart, you’ll notice that the three days of upside euphoria that ushered in the new 2009 trading year have now been completely wiped out. As I write, the Dow has moved from 9,000 back down to 8,500, and it now finds itself below its critical 50-day moving average.
A similar technical formation can be found on the S&P 500, which is below its 50-day moving average and the psychological level at 900.
Because of these two bearish formations, I’d like to move our ledger bias over to the bearish side by adding one new put play on Bunge (BG – NYSE). As you can see from the chart below, BG has been an aggressive upside mover, increasing from $40 back in late 2008 up to a high of $60 here in 2009. But when it comes to momentum trades like this, BG can fall just as quickly as it can rise. And right now, short-term traders are locking in their quick profits, which means they’re taking their money out of BG. As a result, I think the shares have another $10.00 of downside coming. Let’s profit off this bearishness by making a quick downside play using January puts.
PLAY: Buy the BG January 50 Puts (BGW MJ) at or under $3.60, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $5.20.
NOTE: The January options expire on Friday, so this is designed to be a quick trade.
At the same time, continue to maintain your remaining positions. I’ll be out later in the day with further updates. Until then…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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