Take ABT Profits

Bulls Becoming Exhausted?

By Bryan Bottarelli
Wednesday, May 13, 2009 9:54 AM EDT
Wed, 13 May 2009 13:54:00 GMT

PLAY: Sell your ABT June 45 Calls (ABT FI) at market, good for the day.

Dear Bottarelli Research Member,

Well, it appears like the selling pressure that I was expecting over the last three weeks is now finding its way back into the market. The combination of retail/housing numbers that continue to show severe weakness plus an exhausted bull has lead to the chart formation on the Dow shown below:

INDU

In my view, this chart formation is a clear indication that the Blue Chips should re-test the 50-day moving average at 7,750. But we all know how erratic and volatile the markets have been lately, so we’ll continue to operate with extreme caution. Since the bulls have aggressively bought every dip, let’s see if today’s selling pressure can overwhelm them. If so, we’ll see the re-test of the 50-day moving average that I expect.

In terms of our positions, let’s go ahead and lock in profits on our ABT June 45 Calls (ABT FI). As you know, we entered these calls on Monday for $1.70 and they just hit a high of $2.20, good for a respectable 29.4% gainer. Let’s lock in these profits now!

ABT

PLAY: Sell your ABT June 45 Calls (ABT FI) at market, good for the day.

As always, I’ll follow up on our other positions as the trading day progresses. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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