Take SHLD Profits!

Plus: Add MOS Calls

By Bryan Bottarelli
Thursday, August 21, 2008 10:56 AM EDT
Thu, 21 Aug 2008 14:56:00 GMT

PLAY: Buy the MOS September 110 Calls (MOS IY) at or under $7.10, good for the day.

PLAY: Sell your SHLD September 85 Puts (KTQ UQ) at or above $6.40, good for the day.

Dear Bottarelli Research Member,

I think it’s once again time to play calls on potash-major Mosaic (MOS – NYSE). A quick review of the three charts below and you’ll see why. Starting with POT and AGU, you’ll notice that each of these potash producers have put in very strong bounces right at their 200-day moving averages.

AGU

POT

But now look at MOS, and you won’t see the same pattern. In contrast, MOS has yet to trade above its 200-day moving average, and I feel this offers us a great opportunity to make a “catch up” trade.

MOS

After all, potash and fertilizer will remain strong for years to come, and now that the commodity sector is roaring back, it won’t be long before MOS follows the lead of POT and AGU and makes a similar breakout above its 200-day moving average. Therefore, let’s add MOS calls now!

PLAY: Buy the MOS September 110 Calls (MOS IY) at or under $7.10, good for the day. Place a protective stop limit at $4.10 and a pre-determined sniper sell at $8.90.

At the same time, let’s go ahead and lock in profits on our SHLD September 85 Puts (KTQ UQ).We entered these puts on August 18th for $5.50 and they’ve traded as high as $6.60 in today’s action. That’s another quick 20% gainer, so let’s sweep these profits off the table now!

SHLD

PLAY: Sell your SHLD September 85 Puts (KTQ UQ) at or above $6.40, good for the day.

And as always…

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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