Staying Diversified
Add FAZ Calls, Maintain DRQ
PLAY: Buy more FAZ November 24 Calls (FAY KW) at market, good for the day. Adjust your protective stop limit to $0.55.
Dear Bottarelli Research Member,
Good morning. Over the last five (5) trading sessions, we’ve seen some increased selling pressure seep back into the markets. But then, just like that, the markets exploded with a 199-point rally yesterday. From a trading aspect, the takeaway is that the bulls are losing a little bit of control of the markets, as evidenced by their inability to maintain any levels above Dow 10,000. But at the same time, the bulls are certainly not going away without a fight. As a result, we must continue to carry trading positions that put us in position to profit off any sharp upward or downward price swings.
As it stands today, we currently have a rather light trading ledger, represented only by the DRQ November 50 Calls (DRQ KJ) and the protective FAZ November 24 Calls (FAY KW). Since the combination of these two plays offers us a diversified position, I’d like to maintain both positions. In fact, the way that FAZ trades, I think we have a constant opportunity to make a very nice profit. It all depends on timing.
As you can see from the FAZ chart below, the 3x ultra-short financial play dipped below the 50-day moving average yesterday. But as I’ve said before, I was hoping for a dip like this so that we could add to our position. Therefore, let’s take advantage of this downside move today. Lower your cost basis and add to your FAZ calls now.
PLAY: Buy more FAZ November 24 Calls (FAY KW) at market, good for the day. Adjust your protective stop limit to $0.55.
As always, I’ll continue to update you throughout the trading session. Until then…
Lock and load!
Sincerely,
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