Time to Jump

Add RIG and UWM Calls

By Bryan Bottarelli
Monday, March 23, 2009 10:29 AM EDT
Mon, 23 Mar 2009 14:29:00 GMT

PLAY: Buy the RIG April 65 Calls (RKJ DM) at or under $3.20, good for the day. Place a protective stop limit at $1.50 and a pre-determined sniper sell at $5.50.

PLAY: Buy the UWM May 13 Calls (ULG EM) at or under $2.00, good for the day. Place a protective stop limit at $1.10 and a pre-determined sniper sell at $3.10.

Dear Bottarelli Research Member,

First off, congratulations on your PBR April 30 Calls (PBR DF). Shortly after this morning’s alert, our prices officially triggered and our gains were locked in.

Now it’s time to get positioned in two more trades — with specific emphasis on the oil service sector and a super-leveraged (and cheap) play on the small-cap sector.

While I remain skeptical of this rally, we just might see a breakout over the 50-day moving average. If this occurs, I want to ensure that we’re in the very best positions to capitalize on such a move. Therefore, we’ll accomplish this using calls on Transocean (RIG – NYSE) and Ultra Russell2000 ProShares (UWM – NYSE).

RIG

Starting with RIG, the chart indicates to me that we could be witnessing a true upside breakout. Therefore, let’s get positioned in April calls and ride the momentum for all that we can! Here’s the play…

PLAY: Buy the RIG April 65 Calls (RKJ DM) at or under $3.20, good for the day. Place a protective stop limit at $1.50 and a pre-determined sniper sell at $5.50.

At the same time, if we truly are in rally mode, we could see a powerful upside move in the Ultra Russell2000 ProShares (UWM – NYSE). Similar to our other ultra-long plays, the UWM moves at a rate of twice the daily performance of the Russell 2000 index. The thinking here is, if this is truly an upside breakout, we’ll see the small-cap sector outperform the mid- and large-cap sectors. Therefore, the UWM could hand us an explosive way to play any extended upside. For such a cheap price, it makes sense to take a shot at upside calls going into May. Let’s get positioned now!

UWM

PLAY: Buy the UWM May 13 Calls (ULG EM) at or under $2.00, good for the day. Place a protective stop limit at $1.10 and a pre-determined sniper sell at $3.10.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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