Click chart to enlargeLooking to start lightening up on the ag names. We're not heading for the hills, just looking to take some profits while letting about 75-80% of it continue to run. The Ag names have all had nice runs, but are all at different points in their channels. This makes it too hard to call a top. If they all rallied strongly for a couple of days (got ahead of themselves), then a top would be in place. In the absence of that, the best we can do is to take some profits here and there while waiting for the "blow-off" top.
MON and AGU are at the very tops of their channels. POT is about 80% up its logarithmic channel (clearly above its arithmetic one), CF is about 2/3 of the way to the top of its channel, and MOS (see chart above) is at the midpoint.
Charts like MOS and CF lead us to believe that the Ag names have further to run. We'd be taking some profits in MON now, if we owned it. Instead, we own AGU, and will be taking some profits there. We're partial to POT, so we're keeping our shares of POT until a real top is in.
A quick gauge of the relative strength of these stocks (versus one another) can be seen by simply comparing their current prices to their April highs. While MOS, CF, and AGU are at or below their April highs, POT and MON are comfortably above theirs. MON has not typically been a strong name in the group, so we're reluctant to call it a leader, but the good news is that there is no slowdown in POT's leadership. It continues to be the stock to own this year. It is this year's Google.
13 comments:
I sold off my CF at 153. The chart for FXI looked so horrid that I had to buy FXP, even though ag stocks may not have reached their tops yet.
And now I see that the shanghai index has lost almost 8 percent overnight. This is pretty insane.
Snot,
I was wondering if you would give your opinion on RIO. I bought it just above the 50MA. Now I recall some time ago you had the cardinal rule of "sell if it is below 50MA". I didn't because according to my chart it is still in the channel although getting low. I would just like to hear if you would have sold or would still hold.....assuming you would have bought it in the first place :0)
Thanks
Snot, solar is getting buried and shorts are dancing. What's the reason? High oil isn't helping it at all. TIA.
ouch. RIO's chart looks really ugly to me. Like that of a solar stock. It just fell through RSI 40, which is a pretty good sign it is heading downward. I would not be surprised if it falls under its 200dma.
RIOs chart looks just fine, as it's still within it's channel. The 200dma is a good call, as it's bounced off of that a few times already, so it's a good bet that it will do it this time around as well.
Then it should head up to 44-45 or so before rinsing and repeating.
There is no need to take that kind of risk with RIO. Back in march, there was no buy signal until 2 trading sessions after it hit bottom. By waiting for the signal, you would have bought at only 10% above the bottom, and you still would have gotten a 30% gain.
I've been known to catch a falling knife or two. To help me avoid doing that as often, how do you calculate a buy signal, as you did on RIO?
Sure is easy to say you saw a buy signal when looking three months backward at a chart, isn't it?
Snot, yesterday at the open I found myself totally in cash as I got stopped out of T and one ETF. Since MOO (and ag in general) was down after a couple of days mini-correction, and since Snot has convinced me it is a strong sector in a touch economy, I went in deep on margin with MOO. MOO closed yesterday above my cost and will pop well above it today. AGU will pop upwards today. MOS and POT and MON are going to open up nicely, it appears. This may be a good week for me. Thanks, Snot.
if you go to stockcharts.com and look at the chart for CF, you can see one of those little black candlesticks has formed. And if you look at the previous runs up the channel, you can see one of those little black candlesticks at the halfway point of each run.
I dont know exactly what those black candlesticks mean, but everything seems to point to CF at $185 before the end of June.
MOO added 1.8% to my portfolio's value today and afterhours suggest the likelihood of more tomorrow. Thanks again Snot.
You're welcome
And thank you again Snot. MOO added another 1.2% to my portfolio's value today. I'm totally out of ag after selling all my MOO today as I await a correction or, if ag goes higher, watch the rest of you guys continue to count your money.
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