Getting Lucky with DV
Close Play at Break Even
PLAY: Sell your DV February 55 Puts (DV NK) at market, good for the day.
Dear Bottarelli Research Member,
Good morning. In contrast to my comments from yesterday, the major market averages are not reacting strongly to this morning’s jobs number. So far, it looks like a typical market open, with the Dow dipping around 40 points as I write. With another 85,000 jobs gone to end the 2009 calendar year, this leaves the jobless rate flat at 10%. Since this number came in right at the expected level, there is no shock-effect in early trading. So, to continue the analogy I used yesterday, the butt-sniffing continues.
In other news, for-profit education company Apollo Group (APOL – NASDAQ) reported that their fiscal first quarter earnings beat expectations. But nevertheless, the stock is down 5% on renewed fears that the U.S. Department of Education uncovered some concerns surrounding their Title IV program policies. Like I mentioned, the for-profit education group is very susceptible to news flow. If the DOE even hints at policy interactions, the entire sector engages in a fear-based sell-off. That’s exactly what we’re seeing today. Luckily for us, this weakness has found its way to Devry (DV – NYSE), which has once again dipped under the $56 threshold – but once again popped back up. As a result, our DV February 55 Puts (DV NK) have recovered, and are now trading right at our $2.45 entry price. To be honest, I’d like to use this dip as a gift and exit DV right at break even. I just don’t think we’re seeing the downside momentum that can carry this play into the profit zone. With more promising play candidates, let’s sell DV now and move on to bigger fish.
PLAY: Sell your DV February 55 Puts (DV NK) at market, good for the day.
As always, I’ll follow up later in the session. But until then…
Lock and load!
Sincerely,
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