Two New Plays

Add ADM Calls, PRU Puts

By Bryan Bottarelli
Monday, March 16, 2009 12:08 PM EDT
Mon, 16 Mar 2009 16:08:00 GMT

PLAY: Buy the PRU April 20 Puts (PRU PX) at or under $3.20, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $5.00.

PLAY: Buy the ADM April 30 Calls (ADM DF) at or under $1.20, good for the day. Place a protective stop limit at $0.35 and a pre-determined sniper sell at $2.00.

Dear Bottarelli Research Member,

As the Dow continues to push higher, I’d like to carefully get positioned in two new plays. The first is a put play on financial life insurance company Prudential Financial (PRU – NYSE).

PRU

As you can see, PRU has nearly doubled over the last six (6) trading sessions, moving from $11.34 up to $21.40. This move has brought the stock right up to resistance at the 50-day moving average. In my view, this powerful bounce is about to get sold off. Therefore, let’s profit off the move using April puts.

PLAY: Buy the PRU April 20 Puts (PRU PX) at or under $3.20, good for the day. Place a protective stop limit at $1.90 and a pre-determined sniper sell at $5.00.

Let’s also add calls on agricultural commodities giant Archer-Daniels-Midland (ADM – NYSE). As you can see from the chart, ADM has quietly moved above its 50-day and 200-day moving averages, which sets a bullish technical pattern going into the spring planting season. A breakout above $28.00 could spark a move into the mid-$35.00 levels, so let’s play this move using April calls.

ADM

PLAY: Buy the ADM April 30 Calls (ADM DF) at or under $1.20, good for the day. Place a protective stop limit at $0.35 and a pre-determined sniper sell at $2.00.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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