Add DRQ Calls
Playing a US Dollar Dip
PLAY: Buy the DRQ November 50 Calls (DRQ KJ) at or under $2.25, good for the day. Place a protective stop limit at $1.20 and a pre-determined sniper sell at $4.00.
Dear Bottarelli Research Member,
I’d like to start today’s alert by looking at the U.S. dollar. After all, when it comes to commodity price moves (in metals, oil, and so forth), the daily movements of the U.S. dollar completely set the tone. Looking at the chart below (which is an end-of-day chart, and therefore does not include today’s tick), you can see that “Uncle Buck” has moved up over the last four days. Looking back over the last four months, the USD has never gone up for four consecutive days. At the same time, the four-day run is now approaching resistance at the 50-day moving average. As a result, I think the U.S. dollar will soon move back down (which has already begun today).
If this down-move occurs, we’ll see a snap-back in commodity stocks. Therefore, I’d like to get repositioned in our favorite oil service play, Dril-Quip (DRQ – NYSE). As you can see below, it’s no coincidence that DRQ is finding support at the 50-day moving average just as the U.S. dollar is finding resistance at their 50-day moving average. If both sectors move the way I think they will, adding DRQ calls at today’s support level (and after a tremendous dip) will prove very timely. Let’s get positioned now!
PLAY: Buy the DRQ November 50 Calls (DRQ KJ) at or under $2.25, good for the day. Place a protective stop limit at $1.20 and a pre-determined sniper sell at $4.00.
And as always…
Lock and load!
Sincerely,
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