Add MOS Calls

Rally Protection

By Bryan Bottarelli
Monday, April 13, 2009 12:44 PM EDT
Mon, 13 Apr 2009 16:44:00 GMT

PLAY: Buy the MOS May 45 Calls (MOS EI) at or under $3.40, good for the day. Place a protective stop limit at $1.80 and a pre-determined sniper sell at $5.70.

Dear Bottarelli Research Member,

Right now, we have a pretty comprehensive collection of open plays. First off, we’re short Treasuries via the TBT June 44 Calls (TBT FR). This play is sitting right at our entry prices, so continue to hold.

Secondly, we’re long gold via the AEM May 50 Calls (AEM EJ). And third, we’re short the financial sector via our speculative play on the FAZ May 10 Calls (FAY EB).

Taken together, these three plays put us in position to capitalize on any sort of intra-day market move. But just as a precaution, I’d like to add one final play to our ledger, designed to protect us against the continuation of the 5-week market rally. This play comes in the form of fertilizer giant Mosaic (MOS – NYSE).

MOS

Similar to our POT play last week, MOS can shoot aggressively higher in a moment’s notice. And as you can see from the MOS chart above, the 50-day moving average as acted as a very strong level of support, which is why adding calls at these levels makes sense. Any quick bounce off the 50-day moving average (which has been the trend for the last four months) and we’ll be able to lock in a quick winner. Therefore, as an upside market play, let’s go ahead and add MOS calls to our ledger now.

PLAY: Buy the MOS May 45 Calls (MOS EI) at or under $3.40, good for the day. Place a protective stop limit at $1.80 and a pre-determined sniper sell at $5.70.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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