The Mosaic Company (NYSE: MOS)

The Mosaic Company engages in the production and marketing of concentrated phosphate- and potash-based crop nutrients for the agriculture industry worldwide. The company also offers phosphate-based animal feed ingredients; and produces and sells potash for use as fertilizers and animal feed ingredients, as well as for use in industrial applications. Its potash products are also used for de-icing and as a water softener regenerant. The compay’s distribution facilities include sales offices, port terminals, crop nutrient blending and bagging facilities, and warehouses. It sells its products primarily to wholesale distributors, retail chains, cooperatives, independent retailers, and national accounts. The company was founded in 2004 and is headquartered in Plymouth, Minnesota.

To review Mosiac’s stock, please take a look at the 1-year chart of MOS (The Mosiac Company) below with my added notations:

MOS had formed a trend line of resistance (blue) from the end of March until the end of May. In the beginning of June, the stock broke above that resistance signaling a potential end to the stock’s short-term downtrend. Now, after trading sideways for a week or so, the stock has also broke above its $50 resistance level (purple) and should be moving higher from here.

The Tale of the Tape: In addition to breaking out of its downtrend, MOS has broke above its $50 level of resistance. A long position should be entered if the stock pulls back down to that $50 level with a stop placed below $50. A break back below $50 would negate the forecast for a move higher.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!

Christian Tharp, CMT