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MOS & POT Growth & Income Trade Re-Enteries

Both of the closely related agricultural input/fertilizer stocks MOS & POT were added as Growth & Income trades back in early January, with both stocks moving sharply higher & MOS hitting the final target for a quick 16% gain in just 3-weeks. At that time,  I decided to close out the MOS (The Mosaic Corp) trade early at T2 vs. the original final target of T3 since the stock had moved up too much, too fast & the odds for a significant pullback were too high to warrant remaining long at that time. MOS peaked the following trading day, immediately reversed, falling 20% over the next month.

POT (Potash Corp), on the other hand, also continued higher to peak on the same day as MOS, March 7th, although it fell a mere 9 cents shy of the T3 price target of 19.47, where I was planning to also close out the trade early if it got there but the stock fell a just 4/10th of 1% shy of that that 3rd target after hitting the 2nd target for a very quick 17% gain. As with MOS, POT was extremely overbought on the near-term & even intermediate-term time frames & as such, fell along with MOS over the next month. However, as POT has remained well above the max. suggested stop, it is still an active trade.

Other than a quick background to on these trades, I wanted to highlight the fact that both MOS & POT appear to have come full circle after working off those overbought conditions & appear likely to embark on the next leg higher, quite possible to the T4 level on POT & the former T3 final target on MOS in the coming months. These 60-minute charts as well as the bullish posture of the MACD (turning back up) helps to confirm a new entry or add-on to either of these Growth & Income Trade ideas. POT is still an Active Trade & I am going to go ahead and also add MOS back as an Active Growth & Income Trade here on what will likely be a break above this 60-minute descending price channel (confirmed with bullish divergences). correction: prices have now broken out on both POT & MOS on the 60-minute frames since I started composing this post, thereby helping to confirm the entry on both.

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7 Comments

  1. snipertrader April 13, 2016 10:42 am at 10:42 am

    @rsotc – nice objective R/R entry back into these. Good work identifying these and keeping them in your scopes for re-entry opportunities.

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  2. lee1 April 14, 2016 8:25 am at 8:25 am

    Yet another downgrade by analysts on POT and MOS. Doing their best to kill any rallies…

    2016-04-14, 7:07 AM
    Cowen & Company downgrades Potash of Saskatchewan (NYSE: POT) from Market Perform to Underperform.

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  3. Kstellish April 19, 2016 2:12 pm at 2:12 pm

    POT making waves today. Too late for a re-entry?

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    • rsotc April 19, 2016 2:30 pm at 2:30 pm

      Kstellish- POT was certainly a more favorable entry 9% lower the other day but the intermediate & longer-term outlook still looks good. However, with the stock trading up 6.5% today coming up on minor resistance around the 18.00 level, if I wasn’t already long I would probably just take a fractional position, adding on either a pullback or a break above the 18 level & then again on a break above 19.50 level (assuming that you are targeting T4 at 22.20).

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  4. ramunger4 June 15, 2016 6:56 am at 6:56 am

    Good morning Randy,
    MOS has treated me well in the past with your assistance. Price has come back to us – is it a good time to re–enter?

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    • rsotc June 15, 2016 11:14 am at 11:14 am

      @ramunger4 MOS & POT are components of the Agricultural Inputs sector (chart below), which was recently rejected off resistance while putting in a divergent high. As such, the sector, along with POT & MOS, might need some time to consolidate the recent gains before building the energy for a breakout of the 3475 resistance level & the next thrust higher. With decent dividend yields, one gets paid to wait in those two stocks so as long as they hold above support (24.50 on MOS and the uptrend line off the Jan 25th lows on POT) you could take another starter (fractional/partial) position or begin a gradually scale-in program, buying small lots at periodic intervals over the next several months. A more strategic entry would be to wait for the charts of both the Ag Inputs sector as well as MOS and/or POT to set up where a more objective entry or a breakout of a clearly defined pattern exists. Otherwise, even with the dividends, MOS & POT could be dead money for a while if they grind around in a sideways trading range.

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  5. ramunger4 June 17, 2016 7:13 am at 7:13 am

    Thanks Randy!

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