Click chart to enlarge CF is off to the races. It feels too far too fast to us. The other ferts need to play catch up while CF stalls or retreats. But overall, no one can deny today's strength in this sector. The more momentum it gains, the more people will jump on board... leading to even greater momentum. Why CF has been outperforming the others lately is anyone's guess. We don't look at MOS, POT and AGU as being weak. We see today's action as a sign of strength for the entire sector. If the leaders (now CF and TRA? nearing new highs!) remain strong, they will ultimately take the laggards along for the ride.
We'll be looking to scale out of CF if it nears the top of its channel near 185. The short horizontal lines are our average sell and buy prices. Even if we sold here, we would have a decent profit. But we don't sell leaders with explosive earnings growth and p/e's of 10 at midchannel during a rally. That would be breaking our rules.
19 comments:
CF's move of yesterday and today are similar to its launch from 4-03 and 4-04. It rallied an additional 26% in just 11 trading days after that move. If this is the start of a new fert rally and CF does the same as last time, we could see it reach 200 or better by mid August. One can dream.
Snot...I am still holding on to my shares of MOS...it was scary for awhile. Top of the channel for MOS around 170sh?
ADM just baffles me. Glad to see MOS, MON, and POT rebounding.
Top for MOS is around 175, but considering it was the only one of the big four that dipped below its channel, who knows if it will be able to reach the top this time around. Even reaching old highs would be quite a feat from these levels.
Who knew that "all CF" was the way to go?
ADM is not a pureplay, so it's no suprise it isn't participating in the fert rally.
Yes finally a real good day with some green on the board. Thanks Snot..Good thing I decided to go with CF also have some POT and MON, but aside from that RIO was the star player.I have been a bag holder on RIO for a while now. It seemed like it was getting near a bottom as it had stopped falling and today it was up 8% which was so nice to see. I am wondering if this is just a short squeeze and there will be more downside? If you look back on a long term chart it seems like it may have hit a bottom. Trying to decide if I should hang on to this. There are miles of room above. Comments from any appreciated.
Thanks
This is great but I agree with Snot, it feels too far too fast.
Anyone (still) thinking of scaling out from here? Who's gonna hold? Please state your reasons either way, if you would.
Snot, I thought before you said you'd start scaling out around mid channel, given the current volatility in the commodities market. Now it sounds like you'll try riding up to the top.
I'd love to do that too, really I would, I just don't have much faith in trends these days...
Cheers
On april 3rd, CF gained 40% in 8 days.
On april 14th, AGU began a 5 day 25% run.
On Jan 14th, POT lost 30% in 5 days, then gained it all back in the next 5 days.
Just before thanksgiving last year, MOS began a 13 day 45% run.
AGU gained 33% on Dec 18th-24th.
The list goes on...
Mimi, did you sell MOS? We have to find a reason for this fertilizer rally and we're thinking you may have had something to do with it.
Snot what is your price target on POT? I have $270.
Sorry Snot I did not sell :) (see my question to you early at 1:09 pm). In fact as painful as it was I held on because of your advice a few days ago..if you recall you told me to let you know if I sell because MOS will shoot up 10 seconds later so I had to hold on to it. I bought MOS at 140.89 and my plan had been to sell at 160 but as you mentioned earlier it had dipped below it's channel..so maybe I will sell at 150-155?
I love reading your blog everyday and I am grateful to you because I probably would have panicked and sold for a lost, but you taught me to patience.
Hey have you checked the corn futures lately? It has been rallying for a few days now which can explain the rally in fertilizer.
I follow the corn/soybean futures. They are are suport levels and turning upwards after heavy selling, this is another reason to stay/get long in Ag stocks.
Ag is making a strong move right now, im ready for my 30% gain.
Long POT and MON.
Glad you held on, Mimi. Let's hope this rally has legs. We were up as high as a 19% gain since June 1st, and as low as a 9% gain. We're at 14% now, but are hoping to get to 25%. 10%+ a month is obviously not sustainable, but it's sure fun to try.
POT's channel tops out at 265. By the time it gets there (if it does), it will be closer to 275.
That's on a log chart. Seeing as how POT has reverted to the bottom of its arithmetic channel, you should know that the top of POT's arithmetic channel is only at around 225.
Considering on its last two runs that it reached the top of its log channel, it shouldn't be constrained by its arithmetic channel any longer.
I'm done gambling on oil. Obviously that's all this is. There is a distinct possibility that oil could be going to $60 in a short-term downspike. I dont want nothin to do with any stock that is coupled to oil.
I believe it is still too early to think we are going to the top of the channel on the ferts. True CF has broken the top line in a down channel, that doesn't mean it cannot continue drifting down, it only means, the drift rate is slower.
I am long ferts, but there is still work ahead on these charts. We need confirmation. The stock needs to confirm it has traction on that down trend. The next week will be key
I have to be patient, I have to be patient, I have to be patient...
Hey Gang,
what are your guys thoughts on the pullback over the last 2 days for the fert stocks?
Healthy looking or do you think that the downtrend continues? I'm not 100% sure, but selling volume hasn't been huge, which is good. CF and TRA are also doing a lot better than POT, AGU or MOS <- which probably is the weakest of the gang.
Thoughts/opinions?
Today looked healthier than yesterday. Today, they are falling even though oil went up. MOS should have at least spiked up to 130, because oil spiked up to 128 breifly. If I hadnt sold yesterday @ 128, I probably would have sold today @ 127.
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