This ETF Has TRIPLED the S&P 500

-- By Mike Turner

Each week my proprietary data systems scan over 6,000 stocks and ETFs to find the very best trades to make in this current market.  And right now my systems are telling me that agriculture-related stocks are the place to be.

If you've been following the market in recent months, then that shouldn't come as a big surprise.  After all, prices for most agricultural commodities have come roaring back as the global economic outlook has improved, and agriculture-related stocks have followed suit.

For example, since the beginning of October 2009, corn price have shot up +20.3%, cotton has gained +13.0%, and wheat has bounced back +26.7%.  With most of these commodities still trading well below last year's highs, and with demand on the rise thanks to an improving global economy, I expect this rebound to continue.

This week's "Trade of the Week" is an exchange-traded fund (ETF) that is positioned to potentially profit from a rising tide in the global agricultural market.  The fund has tripled the performance of the S&P 500 as agriculture stocks have rebounded, and I expect those gains to continue in the coming months.

Take a look...

I believe the broader stock market is headed a lot higher between the end of this month and the end of January 2010.  And in an upward surging market, I expect agriculture-related stocks to continue to outperform.

A great way to potentially profit from the ongoing rebound in this market is by purchasing the PowerShares Global Agriculture Fund (Nasdaq: PAGG, $25.33).  This ETF tracks the Global Agriculture Index, which includes the largest and most liquid agriculture and farming-related stocks in the world.

I believe PAGG will stay in its current uptrend for at least the next 60-70 days for the following reasons:

      PAGG is trading above my 10-week time-shifted trendline.  Over the past year, that trendline has served almost like a lower support level.  As PAGG moves higher, the trendline moves higher.  Each time PAGG sold off, it tended (not always, but mostly) to stop moving lower as it came in contact with this trendline.  I expect this positive bullish trend to continue in the coming months. 

      The entire agriculture industry is trending in a bullish direction.  This adds some follow-through and momentum to PAGG's share price, as a rising tide should lift shares of the fund's various agriculture-related holdings.

      I like the fact that this ETF is in a very strong bull-mode, having gained approximately +60% during the past year.  PAGG could move a lot higher in the coming months if the current trend continues.

Individual Agriculture Stocks Could Gain Even More

Agricultural stocks are seemingly off to the races, and I think traders can potentially lock in a quick +9.80% gain on shares of PAGG.

But keep in mind that PAGG is a diversified fund that invests in a basket of 40 different agricultural stocks.  Some of those stocks are likely to be laggards in the current market environment, and they could weigh on PAGG's performance.

But others possibly could jump twice as fast as the overall industry.  So if you want to potentially lock in even greater gains, then you should consider only investing in the very best individual stocks in this market.

That means finding companies like fertilizer maker Terra Industries (NYSE: TRA, $37.52), which has gained well over +100% during the past year, outperforming shares of PAGG by a better than 2-to-1 margin.

But Terra Industries isn't my top pick in the agriculture market right now.  Not even close.

Instead, I'm aggressively accumulating shares of two fertilizer stocks that could deliver gains of +53.8% and +61.6% in the coming months if they hit my price targets.  The first company controls 22% of the world's lucrative potash market.  The stock is trading at half of last year's levels, giving it plenty of upside potential, and my proprietary data systems are telling me it could jump from $104 to $160 per share.  Meanwhile, the second stock has been rumored as a possible takeover target, and I think it could gain +60% or more even if an acquirer doesn't scoop it up at today's bargain-basement prices.

You can get the names and ticker symbols of these two stocks, as well as several other top-ranked picks in my exclusive Doublers List, in this week's issue of my premium service -- Mastering the Markets.  To learn more about this service, which contains my top-ranked trades and in-depth market forecasts, click here.

"Trade of the Week" Update

All five of my open trading positions are now showing positive returns.  Our best performer is CTSH, which is up over +12% in just a few short weeks.

During the past week we closed our position in the Short Dow 30 ProShares (NYSE: DOG, $52.75) when the stock hit my $53.30 stop order.  We exited the position with a small $3.40 per share loss.

I like how the rest of my open trades are positioned in this market.  I am cautiously optimistic that the market will settle out and then move higher in the near term.  You can get more details on my forecast and thinking about the direction of the overall market in my premium service -- Mastering the Markets.

One final note... Be sure to check the stop loss prices in this table each week.  They will often change from one week to the next.  I set my stops once a week and typically do not update them until the next week.  Do not forget to adjust your stop loss prices!

(All security prices listed in this newsletter are as of the close of trading on Monday, November 16th.  Visit this link to view a listing of all closed trades.)

Thank you for reading today's issue of Trade of the Week.

Have a great week in the market!

Mike Turner Chief Strategist -- Trade of the Week

P.S. -- Traders need to follow a set of rules to have the best chance for success.  That's why I've developed an entire special report that shows how to create your own game plan for wealth using ETFs.  Get the name of my favorite ETF for today's market and obtain this special report by clicking here.