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Right Side of the Chart

...because anything to the left is history
  
  • POT - Jan 13 201620160113


Long-term Trades- Setups

Long-term Trades are trade or investment ideas that have the potential for significant returns over a longer-term period, typically several months or more. This category of trade ideas might be useful for the longer-term swing trader or investor looking for investment ideas to supplement their existing portfolio and prefers a less active, more hands-off approach to investing.

Jan 132016
 

With an a current dividend yield of 9.7% and the potential for considerable capital appreciation, POT (Potash Corp.) will be added as a Active Growth & Income Trade idea at current levels. Several near-term price targets are provided for typical swing traders while my current preferred target for a longer-term Gr & Inc. trade would be at least T3 (19.47) at this time.

POT daily Jan 13th

POT daily Jan 13th

Although I believe that a decent fundamental case can be made for an investment in POT, as with all trade ideas on RSOTC, the primary reason for entering this trade is due to the fact that the stock offers an objective entry based off the charts (technical analysis). As this 1o-year weekly chart below highlights, the recent bear market in commodities, including agricultural related companies such as POT (a fertilizer producer) has dragged POT down to rarely seen weekly oversold levels, which have historically preceded major bull markets in this stock. While oversold is not a stand-alone reason, especially as a timing indicator, to buy a stock, a case for a long entry here can also be made as POT is currently trading at long-term support (weekly chart) with positive (bullish) divergences in place on the daily time frame.

The current final target, T4, is 22.20 with a suggested stop on a weekly close below 14.90 (about 90¢ below current levels), offering an very attractive R/R of roughly 7:1. Swing traders targeting any of the earlier price targets might consider a more aggressive stop, using an R/R of 3:1 or better.

POT weekly Jan 13th

POT weekly Jan 13th

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