Add WYNN Calls

Adding Upside Exposure

By Bryan Bottarelli
Monday, July 20, 2009 10:48 AM EDT
Mon, 20 Jul 2009 14:48:00 GMT

PLAY: Buy the WYNN August 40 Calls (UWY HH) at or under $2.35, good for the day. Place a protective stop limit at $1.20 and a pre-determined sniper sell at $3.75.

Dear Bottarelli Research Member,

Good morning. Once again, the major market averages are moving higher. Now that the Head and Shoulders formations on both the Dow and the S&P 500 have been completely invalidated, the markets are in the midst of a 6-day winning streak that’s added more than 8% to their values.

INDU

Strangely enough, this rally has come with a mixed bag of earnings. For example, for every stellar earnings report from Goldman or IBM, we have a lousy earnings report from Bank of America, General Electric, or Google. Nevertheless, the markets are completely shrugging off the negative news and focusing on the positive. For now, the bulls own the sentiment – and they continue pushing the markets higher.

Of course, we all know that this cannot last forever. In fact, most of the stock charts I’ve studied today are all giving off the same over-bought indication. But in many respects, this perfectly describes the current market battle. If the market wants to push higher, for example, no technical formation (no matter how bearish) will stand in the way. Therefore, as traders, we must remain very nimble. As the sentiment changes, we must be in position to change along with it. For this reason, I’d like to continue holding our DXD August 46 Calls (DXD HT), MS August 28 Puts (MS TS), and AIG August 15 Puts (AIG TO). I know that I issued a “sell” signal on the AIG position on Friday, but this one moved quite fast. Therefore, I’ll continue to follow it for the benefit of anyone who is still holding.

AIG

But just to balance out our trading ledger, I’d also like to add a new upside call play on Wynn Resorts (WYNN – NASDAQ). As you probably know, Wynn owns two hotels in Las Vegas (the Encore and the Wynn), and they also own the Wynn Macau casino in Macau. Lately, investors have once again flocked into China-based plays, and this bullish China trading has helped WYNN jump above the crossing of their 50-day and 200-day moving averages. If this level can hold, then this will serve as a very strong support for WYNN going forward. Therefore, let’s play this solid base by adding August calls now.

WYNN

PLAY: Buy the WYNN August 40 Calls (UWY HH) at or under $2.35, good for the day. Place a protective stop limit at $1.20 and a pre-determined sniper sell at $3.75.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From July 2009