Click chart to enlargeMonsanto reports tomorrow before the bell. We don't mention MON much just because the percentages on its chart make it less attractive for trading than the other Ag stocks, but MON is actually the largest of the typical Ag names. We just bought some MOS ahead of the report in the 142's. These stocks are still in corrective mode. Any negative (or perceived negative) in tomorrow's report and these stocks could really take a beating because their short term momentum is currently down.
We're hoping for a huge selloff, because we'd be backing up the truck. Of course it could go either way, though. After today's MOS purchase, we're about 10% invested. 16% if you count SMN, MTL and SID. We couldn't resist buying some SID, right at the 100dma and at the bottom of the channel.
Let's all hope for a huge Ag selloff in the morning with a nice afternoon recovery. That is the quintessential entry point.
5 comments:
I feel a bit better knowing that you have MTL...I am tired of seeing it go down..is there any chance though that it will fall further?
anyone have an opinion on the coal stocks? I have MEE at 69.50 not sure if I should hold on or sell.
Mimi,
No one can tell you with 100% certainty where any stock is headed. We've found that by buying after corrections (at the bottoms of channels), and selling after rallies (at the tops of channels), we profit consistently over time. Like anyone else, we have our share of losers. MTL and/or SID may be our big losers this year, or maybe not. There's no way to tell for sure until after the fact. All we know is that we bought well off the top. If they do break down from here, we'll look to bail out when they rebound to around where they are now. It's unlikely that they continue to drop at this pace without a substantial rebound. We're at break even with both MTL and SID because we were patient to wait for them to reach the very bottom of their channels before pulling the trigger. That's because we don't believe in them as strongly as we do in Ag, which we're already starting to scale back into at midchannel.
As for coal, there's no technical sign of any slowdown. If it keeps you up at night to be holding a large sum of it, the standard advice is to sell a portion of it. Selling off just 25% of a position changes the psychology of the trade immensely. Instead of worrying if it's going to drop, you look forward to it so you can replace the missing shares cheaper. In a sense, it puts you in the position of daring the stock to go either way... a dare you'll always win.
My read of MON's chart right now tells me it's a screaming sell. But it's looked good over the last month. That is either a sign that positive inside information has leaked out, or it is just riding the sector hype.
Thank you for the taking the time to respond to me.
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