Have you noticed the strength in Potash (POT, $182.84, up $0.94) lately? The stock is up 40 points since the beginning of the year and is rapidly approaching the $200 level. I mentioned back in January that this stock had a chance to do something special and it certainly hasn’t disappointed.

The company is set to report earnings on April 24 and made a nice 20-point run when it blew away 4Q numbers. The company reported 4Q earnings of $1.16 share while analysts had expected earnings of $0.97 a share.

There’s a good chance their 1Q is pretty much going to be the same way. Remember, the company also started buying back stock when it appeared like it was headed to a $100. Here is what their CEO said at the time: “What happened these last seven or eight trading sessions was just so ridiculous that we felt, if people are foolish enough to want to sell the stock at a cheap price, then we’ll take it from them”.

I also recommended a “strangle” option trade on Potash in January that did rather well. There’s probably a decent strangle trade that is currently available with Potash but with the momentum as strong as it is it may be worth a look to play the May 200 calls (PYPEX, $6.40, up $0.08) straight up. The April option contracts expire THIS Friday so this would allow you more time to take advantage of a run to $200.

Here is the complete article from January:


Update on the Airlines: Delta (DAL, $9.00, down $1.48) is getting punished in afternoon trading after opening the session higher. The stock is down a whopping 13% while the April 10 puts (DALPB, $1.10, up $0.70) are up an astounding 175% after opening at 40 cents. Seems now the market is questioning the merger and the industry as a whole after being so upbeat this morning. I called that one right.

Rick Rouse