Play POT Calls
Strong Turnaround Warrants One New Call
Dear Bottarelli Research Member,
If the bears really wanted to take control of this market, they had a big opportunity to send investors running for cover this morning.
After all, yesterday’s news from Citigroup (C – NYSE) sparked the 360-point sell-off, and today’s news from Merrill Lynch (MER – NYSE) could have just as easily kept the selling pressure locked on full throttle. But so far, the bearish control of this market appears to have been a temporary event — as the major market averages have withstood the downside pressure and teeter-tottered between the green and the red all morning long. As I write, in fact, we’re seeing a strong recovery across the board, and therefore, I’d like to make one quick call play on Potash of Saskatchewan (POT – NYSE).
As you know, POT’s global fertilizer business is red hot, and new supply shortages look to move fertilizer prices even higher here in the near-term. As you can see, POT has remained strong in the face of tremendous market pressure, and this leads me to believe that the shares could pop on any coming market strength. Let’s add a November call position now and get ready to profit off any coming upside. Here’s the play:
PLAY: Buy the POT November 120 Calls (PYP KD) at or under $6.20, good for the day. Current bid/ask spread is $5.70 to $5.80. Place a protective stop limit at $3.00.
Also, some of you have asked me about our recent plays on Excel Maritime Carriers (EXM – NYSE) and BHP Billiton (BHP – NYSE). Make no mistake, I continue to feel that each company is very strong — and I could very well re-enter calls on each company in the near future. You see, when you have a day like yesterday, you need to take a cautions approach and trim down your upside exposure — and that’s exactly what we did. But if you’re still holding these plays, you could very well turn a profit before November expiration, so keep a sharp eye on them and take profits on any upside strength! As always, I’ll offer you all the guidance that I can — and until then…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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