Add ESI Puts
But, Be Ready to Flip into Calls
PLAY: Buy the ESI March 100 Puts (O:ESI 10O100.00) at or under $3.00, good for the day. Place a protective stop limit at $2.10 and a pre-determined sniper sell at $5.20.
Dear Bottarelli Research Member,
As I mentioned this morning, I’ve spent most of the day following the trading patterns on ITT Educational Services (ESI – NYSE). Based on this morning’s warning from APOL, ESI opened the day noticeably weaker, but has drifted higher throughout the session. You can see today’s trading pattern below:
As I look at this chart, it seems like the $103.00 level will offer the key. You see, if ESI cannot break above $103, then the shares will fall back towards support at $92.50. But if EDI can break above $103, it can run up to $107.50 and possibly even $112.50.
Based on this pattern, it’s clear that ESI is setting up for a substantial move, but we’re still trying to see which way it’ll go. Considering APOL’s news this morning, I would think that the for-profit education sector has become more defensive, which supports a downside bias.
Based on this situation, let’s approach it like this...
First, let’s move into the ESI March 100 Puts. If ESI stalls at $103 and moves lower, we’ll be positioned to lock in a nice winner. But, if ESI hits $103 and spikes up, we’ll quickly dump the puts and shift into March calls. Therefore, if the music starts to play, you better be ready to dance. Based on this tactical blueprint, let’s get started in a put position now!
PLAY: Buy the ESI March 100 Puts (O:ESI 10O100.00) at or under $3.00, good for the day. Place a protective stop limit at $2.10 and a pre-determined sniper sell at $5.20.
And as always…
Lock and load!
Sincerely,
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