We got a gift this morning when BHP Billiton, Ltd., (BHP) made a buy out offer for Potash Corp. of Saskatchewan, Inc. (POT). We are long on Archer Daniels Midland Company (ADM) and Bunge Ltd. (BG), seed companies such as Monsanto Co. (MON) and Syngenta AG (SYT), and fertilizer companies such as CF Industries Holdings, Inc. (CF) and Agrium Inc. (AGU). We specifically highlighted POT to buy.
Our thesis was certainly not based on POT getting a buy out bid at this time. The ZYX Change Method Trading Rules dictate that we do not look this gift horse in the mouth and take profits. We will exit all the above mentioned long positions at or near the spike exhaustion points as determined by technicals. We will not hesitate to exit in the pre market if we observe spike exhaustion behavior.
