Add Protection Now
Play SDS Calls
PLAY: Buy the SDS March 35 Calls (O:SDS 10C35.00) at or under $1.60, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $2.50.
Dear Bottarelli Research Member,
First off, congratulations on taking your Sears Holdings (SHLD – NASDAQ) profits this morning. As you know, SHLD began the session with a nice upside pop and then faded lower. This “fade effect” typically happens within the first 30 minutes of trading, which is why I typically like to sell into the early session strength.
Now, as I look at this situation, I still feel that SHLD wants to move higher. Therefore, if the timing is right, we’ll use this fade to our advantage by reloading our calls with a cheaper March strike. With great numbers and a strong stock chart, SHLD is a play we want to remain positioned in to the upside. Stay tuned.
In the meantime, we must beef up or downside protection by adding UltraShort S&P500 ProShares (SDS – NYSE). As you can see below, the SDS has just popped above the 50-day moving average, which could indicate a pending breakout.
At the same time, the S&P 500 chart today is showing a clear and indisputable failure at the 50-day moving average. Therefore, add these protective SDS calls now!
PLAY: Buy the SDS March 35 Calls (O:SDS 10C35.00) at or under $1.60, good for the day. Place a protective stop limit at $0.90 and a pre-determined sniper sell at $2.50.
At the same time, we must reduce our upside exposure, which means it’s time to cut loose our MOS March 60 Calls (O:MOS 10C60.00). Close this position now. Sell. Let’s also cut loose our ESI March 105 Calls (O:ESI 10C105.00) while we still have a profit in hand. Sell.
And as always…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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