Add PRU Puts
Playing a Financial Downturn
PLAY: Buy the PRU November 50 Puts (PWQ JW) at or under $3.90, good for the day. Place a protective stop limit at $2.50 and a pre-determined sniper sell at $6.00.
Dear Bottarelli Research Member,
Despite a slight down day on the major market averages, the financial sector is experiencing the largest percentage decline thanks to a Goldman Sachs downgrade from bank analyst Meredith Whitney.
If you recall, Whitney upgraded Goldman one day before the company reported blockbuster earnings back in July. But now, since the stock has reached her price target, she’s scaling back her guidance. As a result, investors are getting an early indication that the tremendous upside run in the financial sector just might be coming to an end.
From a trading perspective, this has opened up an opportunity for us to add a downside put to our trading ledger in the form of Prudential Financial (PRU – NYSE).
As you can see from the 60-minute chart below, PRU has been unable to push through the resistance level at $50, which indicates to me that the next move could pull shares down to the early October lows around $46.00. Let’s get positioned to profit off this move now!
PLAY: Buy the PRU November 50 Puts (PWQ JW) at or under $3.90, good for the day. Place a protective stop limit at $2.50 and a pre-determined sniper sell at $6.00.
At the same time, maintain your DRQ November 55 Calls (DRQ KK) and your GMCR October 70 Calls (QGM JN).
And as always…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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