Play a BTU Breakout

Plus: CMG Follow Up

By Bryan Bottarelli
Monday, June 30, 2008 12:23 PM EDT
Mon, 30 Jun 2008 16:23:00 GMT

PLAY: Buy the BTU August 90 Calls (BTU HR) at or under $6.50, good for the day.

*FOLLOW UP: Sell your CMG July 90 Puts (CMG SR) at or above $7.00, good for the day.

Dear Bottarelli Research Member,

If you were unable to sell your CMG July 90 Puts (CMG SR) at or above $5.50 last week, then you’re getting a second chance for profits today. As I write, shares of CMG are down $4.80, and this has pushed your CMG puts all the way up to $7.40. Therefore, if you haven’t already done so, lock in your profits now!

CMG

FOLLOW UP: Sell your CMG July 90 Puts (CMG SR) at or above $7.00, good for the day.

Also on the move today are shares of Peabody Energy Corporation (BTU – NYSE).

BTU

As a follow-up to my coal comments this morning, BTU owns interests in 31 coal operations located in the United States and Australia. They also develop Btu conversion technologies which convert coal to natural gas and transportation fuels — and as of last December, Peabody Energy had 9.3 billion tons of proven and probable coal reserves. Yet unlike other coal companies like FDG and FCL, shares of BTU have not been setting a series of new highs — but this could soon change with a pending upside breakout. This could mean that we’re buying BTU at an attractive entry point, so let’s go ahead and enter into BTU August calls now.

PLAY: Buy the BTU August 90 Calls (BTU HR) at or under $6.50, good for the day. Place a protective stop limit at $3.10 but do not place a sniper sell at this time. I’ll mange this position within our daily alerts.

Another company we should watch closely is Compass Minerals (CMP – NYSE).

CMP

They’re a specialty fertilizer company that produces potash crop nutrients. With operations in Goderich, Ontario and Winsford, the United Kingdom, not many investors realize they’re a potash-based play (most of that attention goes to MOS, POT, and AGU). But if investors begin to realize that CMP is another powerful potash play, we could see an extended upside move. Therefore, I’ll watch CMP for a possible upside call play as well. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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