POT - Time to short?

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I’ve had 6 very profitable trades in POT so far.  I’m going for lucky #7.

I think now it maybe time to reverse position.  Now is probably the worst time to chase POT.  There are signs of weakness in volume.  I’m keeping my eye on the June $165 puts.  They were up today 6.67%.  If I can get a dip under $11 I’ll probably get a position on Monday.   I believe we’ll test $180 again, but POT will ultimately come back to the $168-170 level at least near term.  This would give a good short-term short trade.  I’d probably get back in long if the stock can dip below $165 again.

Potash has tested the $165 level for about 9 weeks.  It finally broke out above this week.  The volume is starting to wane and I see signs of weakness.  I think next week POT will close under $170 and may even dip to $165.  I will most likely short the next time it goes above $180 and cover at $170-172.  If it comes down to $165-167, I’m a buyer of calls again depending on the technicals.

Potential Upcoming Trades

• Buy June 2008 $165 Puts @$10.80-10.90 range, Sell at $11.50
• Buy Jan 2009 $300 Calls @$4.50-4.60 range, Sell at $5.00

I do believe these trades will be possible in the next 2 weeks.  The Put this coming week, and the calls the following week.