Add GMCR Puts

Playing a 50-Day Breakdown

By Bryan Bottarelli
Monday, August 17, 2009 10:21 AM EDT
Mon, 17 Aug 2009 14:21:00 GMT

PLAY: Buy the GMCR September 60 Puts (QGM UL) at or under $4.80, good for the day. Place a protective stop limit at $2.30 and a sniper sell at $7.50.

Dear Bottarelli Research Member,

A squall of selling pressure has punished the major market averages this morning. As you can see from the Dow chart below, today’s red candlestick has a size and magnitude unlike anything we’ve see since early July (and those candlestick formations came to the upside). This could be an indication that the bulls are getting exhausted, at least temporarily.

INDU

Throughout this upside run, I’ve kept a sharp eye on the stocks that have gotten completely over-blown. Companies like Wynn Resorts (WYNN – NASDAQ) are on this list. Another is Green Mountain Coffee Roasters (GMCR – NASDAQ). As you can see below, GMCR has just pushed below the 50-day moving average, which is a support level that has held strong over the last four to five months. Today’s breakdown could lead to a super-quick put-play winner. Let’s get positioned now!

GMCR

PLAY: Buy the GMCR September 60 Puts (QGM UL) at or under $4.80, good for the day. Place a protective stop limit at $2.30 and a sniper sell at $7.50.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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