Leading Into Earnings: Add to AEM
Two Triggers Still Working For Us
PLAY: Buy more AEM November 65 Calls (AEM KM) at market, good for the day. Lower your protective stop limit to $1.90 and maintain your $6.50 sniper sell.
Dear Bottarelli Research Member,
Congratulations on your FAZ profits! Once again, our ultra-short plays have handed us nice returns as the market’s upside momentum continues to dissipate. With the banking sector still looking quite weak, be prepared to reload your FAZ call position on any temporary price dip. We might see a slight level of resistance surface at the 50-day moving average, but this will offer us another nice entry-level opportunity. As always, I’ll keep you fully informed.
In terms of our current positions, we’re holding the DXD November 33 Calls (DOF KG) and the AEM November 65 Calls (AEM KM). Looking at the DXD, we entered these calls yesterday for $1.60 and they’ve now hit a high of $1.90. It’s interesting how the FAZ moves at a much higher rate of return than the DXD. Since the Blue Chips are still showing signs of weakness, maintain these calls for more gains.
At the same time, I’d like to add to our AEM November 65 Calls (AEM KM). As I mentioned yesterday, AEM is set to report earnings after today’s close, yet nobody is talking about the upcoming earnings for gold companies. With gold prices breaking $1,000 (and holding this level), I expect AEM to surprise a lot of people. But just like AMZN, the stock is selling off in advance of the earnings report.
A lot of this selling pressure is due to the U.S. dollar, which is up for the fourth straight day. But I see this as a great opportunity to add to our position. After all, the combination of AEM’s earnings and a U.S. dollar that’ll soon move back down could act as two strong triggers for AEM. Let’s act ahead of the crowd and add to our position now!
PLAY: Buy more AEM November 65 Calls (AEM KM) at market, good for the day. Lower your protective stop limit to $1.90 and maintain your $6.50 sniper sell.
And as always…
Lock and load!
Sincerely,
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