Going Into the Close

Add AAPL Calls

By Bryan Bottarelli
Friday, July 10, 2009 2:46 PM EDT
Fri, 10 Jul 2009 18:46:00 GMT

PLAY: Buy the AAPL July 140 Calls (APV GH) at or under $1.65, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $3.00.

Dear Bottarelli Research Member,

Good afternoon. It’s not like me to go most of the morning without an alert, but honestly, all we’ve seen today is the major market averages continuing to drift along the same trend lines. The SPX, for example, continues to cling to the 200-day moving average. According to the Head and Shoulders definition, a reversal pattern is confirmed on a breakdown below this level on heavy volume. Thus far, we haven’t seen this price action. As a result, the technical formation (while quite apparent right now) has yet to be confirmed.

SPX

At the same time, gold and oil keep drifting lower, and most of the stocks on my watch-list have traded in a tight range throughout the session. So, the best advice right now is to stand pat with our current positions. Since I continue to believe that oil prices will keep dropping, I’d like to maintain our DUG July 21 Calls (DZG GU). As you know, we entered these calls for $1.85, and oil prices reversed on us. But since then, oil has once again moved under $60.00, which has pushed these calls up to a high of $1.45 in today’s session. I think there could be one or two more downside price moves on the way, so let’s try to capitalize on such a move going into next week. Hold.

DUG

We’re also holding the ISRG July 140 Puts (AXQ SX), which we entered for $2.80. These puts have traded as high as $3.10 today, so one more downward push and we’ll lock in the profits. Hold for more selling pressure.

ISRG

At the same time, the NTES August 35 Calls (NGH HG) that we entered for $2.30 have traded as high as $2.20 today, so we’re also waiting for one upside push before locking in profits on this play we well. Hold.

NTES

Finally, as we close in on the final 90 minutes of this week’s trading, it’s anyone’s guess how the major market averages will end up at 3:02 CST. In all honestly, it wouldn’t surprise me to see dip-buyers come in and make a stand, similar to what we’ve seen earlier this week. As a result, I’d like to end with one quickie play on Apple Computer (AAPL – NASDAQ).

AAPL

As you can see, AAPL is currently bouncing right off the 50-day moving average, which is a very strong support level. If we see another reversal going into the close, AAPL can shoot higher – and it just might carry over into next week. Therefore, as an end-of-week speculative play, let’s add AAPL July calls for a quick bounce.

PLAY: Buy the AAPL July 140 Calls (APV GH) at or under $1.65, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $3.00.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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