Mosaic Company (MOS) peaked at $89.24 in February 2011 and hit a low in October of $44.86, which was a drop of just under 50%. Two weeks ago, MOS made a low of $49.08, which appears to be holding. Early afternoon Thursday it was trading at $54.63.

• First weekly resistance is at $60.50 and then at $62.65; the major 50% Fibonacci retracement resistance is at $67.30
• As mentioned previously, I like the MACD-Histogram (MACD-His) best on the weekly data, and for MOS, it shows a six-month positive divergence, line b
• A strong move in the MACD-His above the zero line in the next few weeks will be consistent with a major low
• Weekly on-balance volume (OBV) did not confirm the February highs and shows a well-established downtrend, line c
• Weekly OBV did not make new lows with prices in October (line d) and could close above its weighted moving average (WMA) this week
• Short-term support stands at $51.50-$52.50 with stronger support below $50

Agrium (AGU) peaked in February at $99.14 and spent the next eight months declining. The stock reached a panic low of $60.15 in early October. It is currently trading around $69.15.

• AGU is holding above its recent lows at $65.68 with initial resistance in the $80 area, which was the 50% retracement resistance level
• The 61.8% resistance level is at $84.50 with the weekly downtrend (line e) at $89.50
• The MACD-His formed a positive divergence at the lows, line f, but looks ready to turn up this week
• Weekly OBV is acting much stronger than prices, as it formed higher lows, line h, and moved back above its weighted moving average in early October
• OBV is very close to breaking through the resistance at line g
• Daily MACD-His and daily OBV have just turned positive

What It Means: The strong seasonal trend of the fertilizer and agricultural chemical stocks combined with the weekly technical readings -- particularly for Agrium -- favors new long positions. Stops under the late-November lows make the risk well controlled.

How to Profit: For Mosaic, go 50% long at $52.46 and 50% long at $51.84 with a stop at $48.82 (risk of approx. 6.3%). Sell half the position at $58.86.

For Agrium, go 50% long at $71.52 and 50% long at $69.80 with a stop at $64.82 (risk of approx. 6.3%).