Position Update
Maintain All Positions
Dear Bottarelli Research Member,
It’s been a tad bit difficult to gain any directional traction over the last week — especially considering that the Dow has gained and lost the same 300 points every other day. As you can see below, the Blue Chips lost 300 on Tuesday (which moved them under the critical 8,000 level) only to swiftly recover by gaining 260 yesterday. And now this morning, we’re following that up with another 150-point drop.
With moves like this, it’s challenging to ride any options play for more than a day. But as I look over our current positions, I have to say that we’re positioned correctly in virtually every play. For example, we entered the FLR February 40 Puts (FLR NH) yesterday for $3.50, and with the stock down $2.10 today, these puts have traded as high as $3.10 today. With the stock underneath its 50-day moving average, you can expect more weakness ahead. And when this occurs, we’ll be ready to lock in a profit.
We also entered the HES February 60 Calls (IGG BL) yesterday for $2.57, and as of this morning, they’ve traded as high as $3.21. I continue to like the fact that HES is trading above its 50-day moving average, and I expect further price increases to come. As HES continues to move up, we’ll be ready to lock in profits as well.
We’re also holding the AEM February 55 Calls (AEM BK), which we entered for $4.10. As a protective play against market fear, this gold position is on the verge of an upside breakout. If AEM can break above the 200-day moving average, we could be in for a fast upside move. And once again, we’ll be ready to lock in profits.
On the same hand, the MOS February 35 Calls (MOS BG) that we entered for $3.30 are also holding strong at the 50-day moving average. If MOS can get some upside momentum, we’ll be positioned for yet another winner.
Over on the put side, we entered the MHK February 35 Puts (MHK NV) for $3.40, and we also entered the RTH February 70 Puts (RTH NN) for $4.20. As I write, both MHK and RTH are down over $1.00 in today’s trading, which has pushed each position very close to our original entry prices. Further weakness in either play will hand us two more gains as well.
And finally, our speculative play on the LVS February 7.5 Calls (LJJ BU) is still inching slowly lower. I would like to give this one a few more days to regain any upside momentum, but if that doesn’t happen soon, we’ll have to officially close this one out.
If and when it’s time to act on any of these plays, you’ll be the first to know. Until then…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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