Add GG Calls

Playing a Gold Move to $1,000

By Bryan Bottarelli
Tuesday, June 02, 2009 10:56 AM EDT
Tue, 2 Jun 2009 14:56:00 GMT

PLAY: Buy the GG June 38 Calls (GAG FC) at or under $2.00, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $3.20.

Dear Bottarelli Research Member,

As the bulls continue to buy every market dip, the value of gold has officially began its powerful move towards the $1,000 per ounce level. As you can see below, the yellow metal is on the verge of re-testing the mid-February highs, and this strong upside move has been a nice trigger for gold companies.

GOLD

In the past, we’ve played AEM and ABX, but today, I’d like to capitalize on a recent dip in Goldcorp (GG – NYSE) by adding June calls. As you can see below, GG sold off yesterday, but it’s receiving a new round of buying interest today. As gold pushes towards its previous high, I’d expect GG to move in a similar fashion, which means the stock could break above $40.00 in short order. Let’s ride this move now!

PLAY: Buy the GG June 38 Calls (GAG FC) at or under $2.00, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $3.20.

At the same time, continue to maintain your JRCC July 22.50 Calls (JQM GX), AGU June 50 Puts (AGU RJ), and DRYS June 7.50 Calls (OOC FU). As you can see below, JRCC is breaking to the upside, just as predicted yesterday.

The Dry Bulk Index continues to move higher, which should fuel a continued upside move in DRYS.

And AGU looks destined to re-test the support level down at $42.50.

As always, I’ll continue to monitor all of your positions throughout the trading day. But until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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