Add DO Calls

Reloading the Call Ledger

By Bryan Bottarelli
Wednesday, September 16, 2009 11:50 AM EDT
Wed, 16 Sep 2009 15:50:00 GMT

PLAY: Buy the DO October 95 Calls (DO JB) at or under $4.80, good for the day. Place a protective stop limit at $2.30 and a sniper sell at $6.90.

Dear Bottarelli Research Member,

First and foremost, congratulations on your winners this week. As I write, we’ve run off a string of five straight winners, hitting gains of 20%, 43%, 26%, 21%, and 20%, all coming in a matter of days (if not hours). If you also subscribe to Bottarelli Research LEAPS, then your winning streak has been extended to 9 out of 9, with four additional winners of 115%, 51%, 53%, and 42%. All told, we’re using the market’s unbridled irrational exuberance to our favor. As much as I don’t believe in it, that won’t stop us from profiting off it. So in that spirit, let’s keep the profits coming!

NOTE: If you are not yet a Bottarelli Research LEAPS member, I’d like to officially invite you to join our longer-dated options service today. Unlike our daily options plays, LEAPS picks are designed to be a 3-month holding time. To add this powerful service to your investment arsenal, simply subscribe using the secure order form below, and your next LEAPS alert will arrive this Saturday morning at 8:00 AM CST!

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Now back to business. This morning, I highlighted possible plays on ABX and AEM. But thus far, despite the upside push in gold, I’m not entirely convinced that it’s the right time to jump on board with either position. Therefore, I will continue to monitor these plays. If we see a re-test of the daily lows, or a breakout above the daily highs, this could trigger a play. But while we’re still waffling around, let’s continue to sit tight.

In the meantime, I have some interesting opportunities to present to you right now. The first comes in the form of deepwater oil driller Diamond Offshore Drilling (DO – NYSE).

DO

As I reported yesterday, Brazilian oil giant Petrobras (PBR – NYSE) drilled down into 7,100 feet of ocean water, and then drilled an additional 3 miles into the earth’s crust, to confirm a vast deposit of oil and natural gas at their Abaré Oeste location. When it comes to the massive deposits that PBR is sitting on, I’m speculating that they’ll turn to the best-of-breed deepwater drillers to help extract this find. This means names like RIG and DO could be in play for quite a while. Combine with this a bounce in oil prices, and today’s upside breakout in DO looks like something we want to participate in. Lets’ get positioned now!

PLAY: Buy the DO October 95 Calls (DO JB) at or under $4.80, good for the day. Place a protective stop limit at $2.30 and a sniper sell at $6.90.

At the same time, we’re seeing a strange correlation in the share price gains of Las Vegas Sands (LVS – NYSE) and Wynn Resorts (WYNN – NASDAQ) in today’s action. As you know, we locked in a nice 43% return this morning on LVS, as shares opened 4.5% higher. See below:

LVS

But on the flipside, WYNN has not moved at the same rate. In fact, WYNN shares are down on the session. This slight dip could offer us a nice opportunity to add WYNN calls to our ledger.

WYNN

To tell you the truth, we could very well add both WYNN and LVS calls to our ledger going forward. So stay tuned, as the trigger points for these entries could come quickly. I’ll keep you fully updated, as always.

At the same time, I’ll continue to monitor the movements of AEM and ABX for a possible play.

Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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