I see significant breakdowns in many agriculture related names: [[POT]], [[CF]], [[AG]], [[AGU]], [[MOS]], [[CMP]], [[IPI]], Ect.
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Joined Jan 27, 2008
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Obviously food is overrated.
Most are approaching areas which should act as support so it will be interesting to see what happens to these stocks over the next few days. I will be looking to short on any bounce back up to their 50 day MA, which I hope happens. That would allow the right shoulder to be formed on many of these charts also, as they seem to be forming possible H+S patterns, at least to me.
Juice, that’s the funniest remark I’ve read so far today.
Not to mention the cost of driving to the supermarket to buy food…
Mac good stuff on your blog, I’ve been a frequent reader as of late.
lol @ Juice
POT’s estimates were being raised, week after week, and they still blew away the final consensus estimate by $0.21.
They raised full year guidance and said that at these elevated fertilizer prices, they still have to “allocate” product because of shortages.
They bought back 7.5 million shares during the quarter at an average price of $203.30.
So they sell the stock down $50 in the past 4 days.
I posted on A-Dawg’s blog a week or two ago that I was concerned the fertilizer pricing cycle might be getting close to the peak, at least until we see what corn yields will be this fall, so I was getting more cautious on POT (lowering my price target to $240 at a time when the sell side was falling all over themselves raising their targets to over $300. Cannacord is actually at $425).
I guess people are afraid that if the Texas governor is successful in his effort to rollback the ethanol mandate, it will go nationwide and the entire ethanol industry will collapse taking corn prices down with it. And if corn prices collapse, then farmer won’t be able to afford fertilizer at its current price, and they’ll shift production to soybeans, wheat, etc. which are much less fertilizer intensive.
Conference call at 1:00 eastern if anyone is interested.
http://www.nytimes.com/2008/07/23/business/23ethanol.html?em&ex=1216958400&en=6e824834a4b001dd&ei=5087