PPR: Pocket Pivoting Potash (POT) and Agrium (AGU) Lead the Fertz on Friday

Published : October 9 2010 at 11:22 ET

Potash Corporation of Saskatchewan (POT) flashed a buyable pocket pivot off of its 10-day moving average on Friday. POT is showing strong earnings growth over the past two quarters of 224% and 154%, respectively, and is obviously a member of the very hot fertilizer group. We notice that POT also flashed a big buyable gap-up move in the middle of August, and the recent pullback earlier in this past week never violated the intra-day low of that initial buyable gap-up day, which we see as constructive. This looks buyable here, using the low of the gap-up day as your reference for a stop.

We also like the pocket pivot buy point that fertilizer stock Agrium (AGU), another leader in the group, flashed on Friday. This was also a buyable gap-up move, as the stock traded up 5.68 on Friday, far exceeding the 0.75 x the 40-day Average True Range of 2.09, or roughly 1.50 requirement for a buyable gap-up move. This is buyable using the intra-day low of the gap-up day at around 78 as your downside guide for a stop.

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