PPR - Fertilizer Stock Reversals - Are they Buyable?
The fertilizer stocks, including MOS, AGU, and POT all had pocket pivot volume signatures as they reversed around their 50-day moving averages today. We can see an example of this in the daily chart of MOS, below. The question is whether these are buyable. Given the steepness of the prior decline they would not necessarily be optimal, but in the stock market you can try and buy anything as long as you have a clear stop in mind in order to manage risk. If one were to try and buy MOS, for example, right here, then it would make sense to use the 50-dma as a reference for a stop, at the very least. It may, however, be too soon to try and buy a pocket pivot volume signature here as we tend to like to see stocks put in a little sideways work before reversing with a pocket pivot after a sharp, volume sell-off. In the MOS example, the 50-dma is at 77.67, less than 5% from today's closing price of 81.31, so theoretically is within a reasonable range.
Chart courtesy of HighGrowthStock Investor (www.highgrowthstock.com) copyright 2011, used by permission.
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