Mosaic (MOS) has pulled back to a nice level of support with the rest of the Ag sector. Look for buyers to jump in here based on the technical setup.
Further, food and energy prices continue to rise and after a nice period of consolidation could likely resume the uptrend. We have utilized bull call spreads in Mosaic multiple times over the last six months and have had success each time.
A likely target is the $82.50 area in the underlying stock. We will open a 77.50/80 May bull call spread that offers a 1:3 risk/reward ratio. If Mosaic can trade above the sold strike (80) at expiration this position will achieve full profit potential. We are $272 for a potential return of $728 at expiration.
Trade Idea:
BUY +4 VERTICAL MOS 100 MAY 11 77.5/80 CALL @.68 LMT
Trade Details:
Type: Bull Call Spread
Expiration Month: May
Breakeven Level(s): $78.18
Maximum Gains: $728
Profit Taking Level: $350
Maximum Loss(es): -$272
Stop Loss: -$100