Loads of Candidates

Waiting For Triggers on PBR, RIG, JRCC, POT, LVS, and GMCR

By Bryan Bottarelli
Tuesday, September 15, 2009 10:17 AM EDT
Tue, 15 Sep 2009 14:17:00 GMT

Dear Bottarelli Research Member,

Good morning. Right off the bat, I’d like to keep an eye on Brazilian oil giant Petrobras (PBR – NYSE). This morning, they announced a fresh oil discovery in the Santos Basin region, which comes on the heels of their massive find in the Guaray region last week (which, by itself, is thought to contain 2 billion barrels of oil).

Petrobras drilled 7,100 feet of ocean water and then drilled another 3 miles into the earth’s crust, and the results indicated a prolific oil and natural gas reserve. This marks the eighth major discovery in the Santos Basin over the last three years, supporting the idea that this region contains significant and untapped resources off the coast of Brazil.

From a chart perspective, PBR has a triple top formation with an unfilled gap to the downside, but if the stock can fill this gap and break above the triple top, it could trigger a strong upside call play. More to come.

PBR

SIDENOTE: These massive deep-water reserves off the coast of Brazil also support the bullish case for oil drillers like RIG and DO, so I’ll continue to monitor these plays as well.

RIG

In the meantime, I have some nice trading candidates that I’d like to act upon the moment the timing is right. First up is James River Coal (JRCC – NASDAQ). If you subscribe to Bottarelli Research LEAPS, then you know that coal stocks have been quietly moving higher. This allowed us to lock in a nice 65.79% return yesterday on Arch Coal April 15 Calls (AGH DC).As you can see below, this strong upside momentum has also found its way into JRCC, which could lead to more momentum-based upside. If this morning’s rally dips a little, that could hand us the ideal time to jump into calls. Await my signal.

JRCC

Another candidate is Potash Corporation of Saskatchewan (POT – NYSE). Whispers up in Canada revolve around a possible takeover bid on POT, which could act as a very nice upside catalyst. At the same time, you can see that the stock is bouncing right off the strong support level at the 200-day moving average, which could very well set the near-term floor in the stock. Await my signal.

POT

I also continue to like the idea of playing Las Vegas Sands (LVS – NYSE) to the upside. As you know, we hit a nice winner on LVS yesterday, based on loosened travel restrictions in Macau (leading to increased gambler traffic) and a pending IPO from both WYNN and LVS. If LVS pulls back to around $18.00, we just might play more calls. Stay tuned.

LVS

And just to balance things out, now might be the time to reverse direction on Green Mountain Coffee (GMCR – NASDAQ). As you know, we hit a nice intra-day winner yesterday by playing GMCR calls. But today, that upside looks to be fading away, which supports jumping into puts. This could be another bear trap, so I’ll continue to follow it closely.

GMCR

The moment the time comes to act on any of these candidates, you’ll be the first to know. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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