One Final Trade
Add FLR Puts
PLAY: Buy the FLR March 35 Puts (FEM OG) at or under $2.45, good for the day. Place a protective stop limit at $1.30 and a pre-determined sniper sell at $4.10.
Dear Bottarelli Research Member,
The market internals have gotten weaker as the day has progressed. And then, we witnessed a remarkable recovery, which entirely wiped out a 160-point loss on the Dow. As you can see below, the Dow hit a low that it hasn’t seen in years — and then it somewhat recovered. The selling pressure has been fueled by mounting talk about nationalizing some of the top U.S. banks, and this is sure to send shivers down everyone’s spine. The ugly Dow chart is shown below:
Because of today’s new lows, I’d like to add one final put position leading into the close — and the candidate comes in the form of Fluor (FLR – NYSE).As you can see from the FLR chart, today’s downside move has penetrated the previous February low, which indicates that FLR could re-test the $30.00 level in short order. Because of this technical pattern, let’s enter into a new round of FLR puts now.
PLAY: Buy the FLR March 35 Puts (FEM OG) at or under $2.45, good for the day. Place a protective stop limit at $1.30 and a pre-determined sniper sell at $4.10.
In terms of our other two positions, AGU has remained rather strong for most of today’s volatile trading session. Therefore, maintain your AGU March 40 Calls (AGU CH).
At the same time, I’d also like to hold our NEM March 40 Puts (NEM OH) as well. Now I admit, holding NEM puts might sound counterintuitive right now, but everyone and their brother is recommending gold right now. This smells awfully like a near-term top to me. Going into next week, we could see a gold pullback, which will drive out everyone who is piling into gold at the $1,000 level.
From a strategic standpoint, I’d like to ride this move down, lock in profits on our NEM puts, and then transition over into a new upside call play. We’ll follow up on this tactical maneuver next week. Until then,
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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