The Beginning of the Fall?

Add CTRP Puts

By Bryan Bottarelli
Wednesday, August 05, 2009 10:23 AM EDT
Wed, 5 Aug 2009 14:23:00 GMT

PLAY: Buy the CTRP August 50 Puts (QCT TJ) at or under $2.90, good for the day. Place a protective stop limit at $1.30 and a sniper sell at $4.50.

Dear Bottarelli Research Member,

Good morning.Over the first 50 minutes of trading, the major market averages have done something that we haven’t seen for quite a while. And that is, extend upon a sell-off. As you can see from the SPX chart below, today’s red candlestick at the 1,000 level could indicate the end of the bullish run. But then again, this could be yet another false high. Therefore, we’ll continue to play these moves with extreme caution.

SPX

When it comes to the two-sided play that we entered on August 3rd, let’s continue holding the SDS August 45 Calls (SSH HS) for more selling pressure. But when it comes to the China/Oil catalyst, we’ve seen that upside trend quickly dissipate. Therefore, let’s close out the PTR August 125 Calls (PTR HE) now. Sell.

In terms of a new play, there’s a good chance that we could see a substantial downside move on Ctrip International (CTRP – NASDAQ). The company is really nothing more than an all-inclusive travel agent that provides hotel accommodations, airline tickets, and packaged tours in the People’s Republic of China. They announced earnings today that rose 25% from Q3 2008, but analysts were expecting a rise of 27%. As a result, the stock is losing its premium growth price. Let’s play this momentum-based sell-off by adding August puts now.

CTRP

PLAY: Buy the CTRP August 50 Puts (QCT TJ) at or under $2.90, good for the day. Place a protective stop limit at $1.30 and a sniper sell at $4.50.

Let’s also hold our AEM August 60 Calls (AEM HL) and our STP August 20 Calls (STP HD). As always, further updates will come as needed. Until then…

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 August 2009