Two New Plays

Add MOS and FDG Calls Now

By Bryan Bottarelli
Monday, May 05, 2008 10:24 AM EDT
Mon, 5 May 2008 14:24:00 GMT

PLAY: Buy the FDG June 65 Calls (FDG FM) at or under $4.60, good for the day.

PLAY: Buy the MOS May 130 Calls (MTJ EF) at or under $3.90, good for the day.

Dear Bottarelli Research Member,

After taking nice gains on our EXM June 45 Calls (EXM FI), I’d like to establish two additional positions that could experience similar returns.

The first position is a coal play via Fording Canadian Coal Trust (FDG – NYSE), which is an open-ended trust in Canada that holds a 60% interest in Elk Valley Coal (which produces and sells metallurgical coal, used by the integrated steel mills). As you can see from the chart below, FDG looks ready for a strong upside push into new highs in the $70.00 range, so let’s play this upward momentum into June. Here’s the play:

FDG

PLAY: Buy the FDG June 65 Calls (FDG FM) at or under $4.60, good for the day. Place a protective stop limit at $2.10 but do not place a sniper-sell order at this time. I’d like to let this one run.

The second position this morning is a little more speculative — and it comes in the form of May calls on the global crop nutrient and animal feed company Mosaic (MOS – NYSE). As you probably know, MOS (along with POT) are the two most aggressive momentum stocks, based simply off the fact that they absolutely dominate the global market for fertilizer. Therefore, both stocks have the ability to make substantial intra-day price swings. And as you can see from the chart below, it looks like MOS could blast to the upside at any moment, so as a more speculative upside play, let’s get positioned to profit off any forthcoming up-moves now!

MOS

PLAY: Buy the MOS May 130 Calls (MTJ EF) at or under $3.90, good for the day. Place a protective stop limit at $1.40 and a pre-determined sniper sell at $5.40.

And at the same time, continue to hold your GS May 210 Calls (GPY EB) and your ABX June 42.5 Calls (ABX FV). And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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