Speculators See Extended Rally for The Mosaic Company (MOS)

Mosaic Co's (MOS) weekly calls are in high demand

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Published on Jan 20, 2015 at 11:34 AM
Updated on Apr 20, 2015 at 5:32 PM

Mosaic Co (NYSE:MOS) gapped higher to $47.55 this morning, after raising its fourth-quarter forecast -- also providing a halo lift for sector peer Potash Corp./Saskatchewan (USA) (NYSE:POT). This revised outlook for MOS -- which was last seen 2.1% higher at $46.96 -- has translated into increased activity in its options pits, especially among the bulls.

Today's speculators are primarily targeting calls, which are trading at three times what's normally seen at this point in the day. In fact, nine of the stock's 10 most active strikes are calls, with the weekly 1/23 47.50 and 48 strikes attracting notable attention. It appears activity at these strikes is mostly of the buy-to-open variety, meaning speculators are eyeing an extended rally for MOS, hoping the stock lands atop the respective strikes by this Friday's close, when the contracts expire.

Elsewhere, analyst sentiment is mixed toward MOS, as six analysts rate the stock a "buy" or better, with seven handing out "holds," and two deeming it a "strong sell." However, should the security please today's bullish bettors and continue its upward movement, future price-target hikes could come. The stock is now only a chip-shot from its average 12-month price target of $49.95.

For the most part, Mosaic Co (NYSE:MOS) has been a technical laggard, dropping 2.8% year-over-year. Still, today's price action has the security poised to settle atop its 200-day moving average for just the second time since August, and on pace to topple its 80-week moving average for only the second time since July 2013.

Weekly Chart of MOS since July 2013 With 80-Week Moving Average

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