NEW DIRECTIONAL CALL PLAYS
Monsanto Co. - MON - close 58.97 change -0.19 stop 55.75
Monsanto Co. along with its subsidiaries, is a worldwide provider of agricultural products for farmers. The Company's seeds, biotechnology trait products, and herbicides provide farmers with solutions to produce foods for consumers and feed for animals. The Company operates in two segments: Seeds and Genomics, and Agricultural Productivity.
Target(s): 63.75, 65.90,
Key Support/Resistance Areas: 66.00, 62.30, 58.50, 56.00
Time Frame: 1 to 3 weeks
Why We Like It:
The agriculture sector is heating up and gaining momentum. Farmers want and need to grow more food to keep up with demand, especially from emerging markets. Many potash companies have seen significant gains in recent weeks because potash levels need to be replenished in farmland soil. MON is a downstream play in this space as they provide the seeds and herbicides to actually grow the crops. I also believe this stock and sector can do well in a down market. Technically, MON has been beaten down but is now showing signs of life. The stock is forming a bull pennant above its 20-day and 100-day SMA's and a key pivot level for the stock dating all the back to early 2007. I suggest readers take advantage of the gaining momentum and initiate long positions now. I'm looking for MON to make a run up towards its 200-day SMA and prior support area near $66.00, both of which are above our immediate targets (which are +6% and +10% higher). Our initial stop will be $55.75.
Suggested Position: Buy October $62.50 CALL, current ask is $1.84
Annotated Weekly Chart:
Entry on August xx
Earnings Date 10/6/2010 (unconfirmed)
Average Daily Volume: 7.2 million
Listed on August 18, 2010