Add GG Calls

Playing a Metals Bounce

By Bryan Bottarelli
Tuesday, June 23, 2009 2:00 PM EDT
Tue, 23 Jun 2009 18:00:00 GMT

PLAY: Buy the GG August 35 Calls (GG HT) at or under $2.40, good for the day. Place a protective stop limit at $1.20 and a pre-determined sniper sell at $5.00.

Dear Bottarelli Research Member,

For the most part, the major market averages have flat-lined in today’s trading. Neither the bulls nor the bears have been able to make a stand, resulting in an extremely narrow trading range below the Dow’s 50-day moving average. See the action yourself below:

INDU

In moments of indecision like this, it’s smart to own exposure to both sides of the markets – which is why I’d like to continue holding our TBT July 52 Calls (TVT GZ) and our GS July 135 Puts (GS SG). But just to broaden our sector exposure, I’d like to get repositioned in the one sector group that’s making the biggest move today. And that’s gold plays.

Looking specifically at Goldcorp (GG – NYSE), you can clearly see a strong bounce right off the 50-day moving average. Going into the close, prices may dip back under $34.00, but I think that the support level right around $33.00 has now been established. Therefore, let’s take advantage of the metals dip to add August calls on GG now.

GG

PLAY: Buy the GG August 35 Calls (GG HT) at or under $2.40, good for the day. Place a protective stop limit at $1.20 and a pre-determined sniper sell at $5.00.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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