Fertilizer stocks flash 'buy' signals
Sharp recent gains may mark the beginning of a new uptrend. Investors who act now can get solid entry points on 3 industry leaders.
- The trading range has upside targets in the 1020 area with long-term resistance in the 1080-1100 area
- The relative performance (RS) broke through its downtrend, line c, in late May and has now turned up sharply. It is leading prices higher, just as it forecasted a sharp plunge in stocks like Bank of America (BAC) early in the year
- The on-balance volume (OBV) has turned up from its weighted moving average (WMA) and looks ready to overcome resistance at line b. The OBV has good support at line e.
- The weekly OBV (not shown) is acting stronger than prices
- The recent pullback to 927 held above the short-term 50% support
- The strong close Thursday on good volume suggests a move through the daily chart resistance in the $159.40 area (line f)
- A completion of the trading range, lines f and h, has upside targets in the $180-$186 area
- The pullback this week held the support from the April-to-May highs, line g, in the $145 area
- The daily OBV has turned up from support and is above its weighted moving average. The weekly OBV (not shown) continues to make new highs.
- POT has been holding above the gradually rising 200-day moving average (MA)
- There is short-term support now at $52.55, which was Wednesday’s low
- The daily OBV closed back above its weighted moving average on Thursday as the volume was the highest of the past two weeks. It is not far below its downtrend, line c
- The weekly OBV (not shown) did confirm the February highs
- There is first resistance at $57.86 with the downtrend, line a, at $58.80. There is stronger resistance now at $61.80-$62.20
- The daily chart shows that MOS made a lower low on Wednesday at $64.74, but the daily OBV has formed a bullish divergence, line g. A move in the OBV above resistance at line f would be positive
- There is next chart resistance at $72 (line e) with the daily downtrend at $75.50
- The major 61.8% retracement resistance is in the $80 area
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These financials have thrived during a time of weak loan growth, decreased mortgage production revenues and the end of the Fed's QE program.
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