Mosaic (MOS) has been consolidating for a few days now and decided to bounce on news that Germany's K+S boosted 2008 earnings estimates after reporting great earnings. MOS and POT have also benefited from soaring potash prices because of tight supplies. Prices of potash -- the rarest of three key plant nutrients, with nitrogen and phosphates the others -- have soared to record levels. Farmers around the world are trying to capitalise on rocketing grain prices, which have caused food inflation in some countries and shortages in others.
So we are going to the agricultural well one more time to sell the 110 Puts for June. More aggressive option traders may wish to sell 2 contracts to our conservative one. The max return is pretty high at 20%. Once the stock finds some resistance (Around 135 - 140) we can sell the OTM calls.
Technically speaking, MPOS has established some great support near 120 and again at 116 (April lows and 50 DMA). The gap around 110 hasn't been filled though. That's why we are selling the 110's. As mentioned above, resistance is at the high at $143. Both RSI and Slow Stochastics are turning up from today's $3.40 advance.
I prefer to use the $116 stop level because of the April low and moving average.