Add AEM Calls

Gold to $1,000?

By Bryan Bottarelli
Wednesday, September 02, 2009 12:57 PM EDT
Wed, 2 Sep 2009 16:57:00 GMT

PLAY: Buy the AEM October 65 Calls (AEM JM) at or under $2.70, good for the day. Place a protective stop limit at $1.40 and a sniper sell at $4.50.

Dear Bottarelli Research Member,

Earlier this morning, I mentioned how gold positions have been on fire today. As I study the gold chart (noted below), it’s important to recognize that the yellow metal is breaking out of its recent trading range. As you can see, today’s shot up to the mid-$970 level (circled) indicates that we could be in store for a continuation move up to $1,000.

GOLD

Based on this, I’ve been waiting for AEM or ABX to pull back. It hasn’t happened. Therefore, let’s carefully jump on board this momentum trade by adding a small October position on AEM. The idea here is to utilize gold price momentum to quickly ride AEM higher. Since the stock is up sharply today, play this once a little on the lighter side. We’ll also utilize an October expiration to use the momentum shot to our advantage.

AEM

PLAY: Buy the AEM October 65 Calls (AEM JM) at or under $2.70, good for the day. Place a protective stop limit at $1.40 and a sniper sell at $4.50.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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