NEW BULLISH Plays
Intrepid Potash - IPI - close 24.07 change +1.01 stop 22.25
Intrepid Potash, Inc. is a domestic producer of muriate of potash. It is also engaged in the production and marketing of potash and langbeinite. The Company markets the langbeinite under the name of Trio. As of December 31, 2009, the Company owned five active potash production facilities, including three in New Mexico and two in Utah. During 2009, the Company produced approximately 504,000 tons of potash.
Target(s): 25.35, 26.30, 27.20
Key Support/Resistance Areas: 27.40, 26.50, 24.25, 22.65
Time Frame: 1 to 2 weeks
Why We Like It:
The agriculture market is heating up, literally. Heat waves and fires are causing a shortage of agriculture commodities and it is causing prices to spike. Farmers want and need to grow more crops and they need fertilizers to do it. So we are back with a play in IPI which was a dropped play a few weeks ago because we did not get triggered. Technically IPI has retraced about 50% of the +35% spike off of its 52 week low that was printed on 7/1. Today the stock bounced hard just above its 50-day SMA, gaining +4% and printing a bullish engulfing candlestick in the process. This appears to be the higher low that will lead to new highs. I suggest we use one of two triggers to enter positions which should happen tomorrow. If IPI trades to $24.42 (above today's high) or on any weakness to $23.90. The stock is up 23 cents in the after hours so we may get filled at the higher price. Regardless, the momentum is building and I think IPI will re-test its recent highs or print new highs. I've offered a near term target for readers looking for a quicker exit but I'm ultimately looking for the stock to head up to $26 to $27.
Suggested Position: Long IPI stock
Options Traders: Buy September $25.00 Calls, current ask $0.95
Annotated daily chart:
Entry on August xx
Earnings 11/4/2010 (unconfirmed)
Average Daily Volume: 937,000
Listed on August 12, 2010