I’d consider holding off from adding until & unless the stock starts to move higher (assuming it doesn’t stop out) & ideally on above average volume AND with the majority of the other fertilizers stocks also moving higher, as the ultimate success or failure of this trade most likely hinges on what the sector does. Also note that many seasoned traders will never average down on a position solely to reduce their cost basis, rather they often prefer to add to the position at higher prices, as that confirms their analysis was likely correct as the trade is playing out. Here’s the updated chart:

pangblood, I agree. Although volume on IPI was tracking well above average for the first 30-minutes of trading today, it has since tapered off drastically. I expressed my concerns earlier on my comment below the RKDA trade, another related ag stock which also popped above its downtrend line today in sympathy with the POT/AGU merger buzz.

Volume helps to validate a breakout but price comes first so for now, RKDA & IPI are active trades although I also shared my thoughts about waiting for additional price & volume confirmation on RKDA for those that didn’t take it on the post-opening pop, which was just a penny above the entry/breakout price. While I may decide to revise the stops on either IPI and/or RKDA higher if I don’t like what I see in the next day or so, you might want to use a more aggressive stop to minimize losses, should these prove to be false breakouts (which can often be followed by sharp moves back down below the breakout level).

@rsotc I’m a little concerned about the volume 4.7 mil, 9x avg volume (542k avg volume according to RBC). Which seems like a bit too much compared to your benchmark 3x avg volume breakout requirement. Im worried that all the buying volume has exhausted (buying climax?), what are your thoughts.

Thx oxienergie. That is most likely the catalyst for the IPI & RKDA breakouts today.