Kicking Off Q4 in Style

Add POT Calls

By Bryan Bottarelli
Monday, October 01, 2007 10:12 AM EDT
Mon, 1 Oct 2007 14:12:00 GMT

Dear Bottarelli Research Member,

As we kick off the first trading day of Q4 2007, it’s important to note that Q4 has historically been a very good time to be long the market. The Dow, for example, has registered gains in Q4 for nine consecutive years. And over the past 27 years, the Dow has registered Q4 gains in 24 of them. Impressive! The same goes for the S&P 500, which has increased in 13 out of the last 15 forth quarters, helping the index average a very strong return of 6.3% during these three months. So as we close in on Dow 14,000 here on the first day of Q4 2007, I’d like to establish a new upside position in Potash of Saskatchewan (POT – NYSE) going into November.

As I’ve mentioned before, POT is the world’s top fertilizer company by capacity and stock market value, and demand is soaring. Thanks to worldwide population increases, primarily in China, India and Brazil, the need for crop fertilizer has never been stronger. In fact, POT is having a hard time meeting the demand — which is why POT expects their gross margins to at least double as they expand going into 2008 and 2009. And of course, this all bodes well for continued stock price appreciation. Check it out:

POT

As you can see, POT is blasting up to $110.00 per share without anything stopping them from hitting $120 or $130 in the near term, so let’s establish a November call position and ride this tremendous upside. Here’s the play:

PLAY: Buy the POT November 110 Calls (PYP KB) at or under $7.60, good for the day. Current bid/ask spread is $6.80 to $7.40. Place a protective stop limit at $4.10.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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