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New Plays

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New Watch List Plays Triggered
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BTU $77.59 - Peabody Energy

That was not exactly how I wanted to enter Peabody. The breakout to $81 triggered our entry just before the market weakness knocked $5 off the price for the week. Support is $72 and the rest of the sector is still hot. I am putting the stop a $70 to start.

Company Info:

Peabody Energy Corporation (Peabody) is a coal company. During the year ended December 31, 2007, the Company sold 237.8 million tons of coal. It sells coal to over 340 electricity generating and industrial plants in 19 countries. At December 31, 2007, the Company had 9.3 billion tons of proven and probable coal reserves. The Company owns majority interests in 31 coal operations located throughout all the United States coal producing regions and in Australia. In addition, it owns a minority interest in one Venezuelan mine, through a joint venture arrangement. Most of the production in the western United States is low-sulfur coal from the Powder River Basin. Peabody owns and operates six mines in Queensland, Australia, and five mines in New South Wales, Australia. During 2007, the Company generated 89% of its production from non-union mines. On October 31, 2007, Peabody spun-off portions of its Eastern United States Mining operations business segment to form Patriot Coal Corporation.

Breakout target: $81 Hit 6/09

Position: 2010 $90 LEAP Call LLW-AR @ $19.92


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New Non-Energy Plays
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TRA - Terra Inds

I wanted to get back into Mosaic after we were stopped out in May but the stock simply won't slow down. Rather than miss the entire fertilizer sector I found a stock that has been lagging but appears about ready to break out to new highs as well and the LEAPs are still cheap. TRA has resistance at $50-$51 but over that level could catch fire.

Company Info:

Terra Industries Inc. (Terra) is a producer and marketer of nitrogen products, serving agricultural and industrial markets. The Companys business is organized into two segments: Nitrogen Products and Methanol. The Nitrogen Products business produces and distributes ammonia, urea, urea ammonium nitrate solutions, ammonium nitrate and other nitrogen products to agricultural and industrial users. The Methanol business manufactures methanol, which is principally used as a raw material in the production of a variety of chemical derivatives, and in the production of methyl tertiary butyl ether (MTBE). Terra owns a 75.3% interest in Terra Nitrogen Company, L.P. (TNCLP), which, through its subsidiary, Terra Nitrogen, Limited Partnership, operates Terras manufacturing facility at Verdigris, Oklahoma. The Company is the sole general partner and the majority limited partner of TNCLP. On September 14, 2007, the Company formed GrowHow UK Limited, a joint venture with Kemira GrowHow Oyj.

Buy 2010 $60 LEAP Call KMK-AL *** at $8.00 or less ***

Currently the bid/ask on the $55 call is 8.00/8.50 but the
bid/ask on the $60 is 11.60/12.10. The quote is an error that should correct on Monday. I would just buy the $55 but I like to have an even number strike in case of a stock split.

 

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