Add AEM Calls
Getting Ahead of a Gold Breakout
PLAY: Buy the AEM February 55 Calls (AEM BK) at or under $4.20, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $6.50.
Dear Bottarelli Research Member,
Talk about a rude welcome!Just moments before President Obama takes office, the Dow has moved 180 points lower, which once again brings the Blue Chips dangerously close to the 8,000 level.
As you recall, the Dow bounced nicely off this 8,000 level late last week, which gave the bulls a ray of hope leading into today’s inauguration. But this morning, fresh banking fears from overseas have once again sparked an aggressive sell-off. As I write, the Dow chart looks like this:
Now, we’re currently positioned on both sides of the market. On one hand, we have MOS and LVS calls, both of which could hand us an explosive upside move on any forthcoming market strength. Since MOS is still hovering above its 50-day moving average, I continue to like the set-up that’s being formed. Hold.
On the other hand, we’re also holding RTH puts, which have now officially broken below their 50-day moving average, signaling more weakness ahead. Continue to maintain all of these positions.
At the same time, I think we’re on the verge of an aggressive upside breakout in the major gold stocks. Shortly after locking in a 33% profit on our ABX calls this morning, we witnessed a significant breakout above the powerful 200-day moving average. As you can see with GLD below, the yellow metal has officially broken above this level. And following suite are plays like ABX and NEM (shown below).
Therefore, I’d like to get positioned (once again) in the gold sector. And today, we’ll do this using Agnico Eagle Miners (AEM – NYSE). Similar to ABX, GLD,and NEM, AEM could be setting up for a powerful upside breakout — and I want to get positioned to particulate in the rally. Therefore, let’s add AEM February calls now!
PLAY: Buy the AEM February 55 Calls (AEM BK) at or under $4.20, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $6.50.
And as always…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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