Agro-vate the Farmer: Greetings, Mr. Anderson

No, The Andersons, Inc. (NASD: ANDE)   (PPT: “Buy”) is not your next door neighbors’ lemonade stand gone corporate, but rather a supplier and servicer to the farm industry, with a number of different agricultural lines.   I ran across them last night while going over some of my old charts, and they look to be making something of a comeback here.   I imagine they got hammered like they did as a result of the ethanol backlash, as they had made ethanol services a large part of their marketing pitch back when that was the cool thing to do.   Ah well — live by the corn likker jug, die by the corn likker jug, that’s what Pappy always used to say.  

Note that this chart is still in “setting up” phase, as price has not yet escaped the “zone of torpor” boxed by the price-volume bar metric above.   That said, I believe the “Moo stox” will be starting to heat up again with the glimmer of the inflationary hortex on the horizon,  so it’s better we put this one on our watch screen sooner rather than later.  

Strong volume is one indicator of possible future activity that I find particularly useful, and ANDE traded over 2.8x its average volume yesterday.  It was still above average today even with a decent pullback.  As well, the stock has managed to leap above its 8, 20 and 50-day EMA’s in a single bound, and was able to stay well above those markers even after today’s pullback.   That action is encouraging, with the caveat that it would not be unusual to see ANDE  pull back all the way to its 50-day EMA ($14.56) with additional “digestion” in the next few days. 

  I don’t think that will do any damage to our “of interest” thesis, however, as I believe that unless the huge volume spike was only a fluke, we will see a continuation out of the congestion zone, and perhaps “dance the jimmy” all the way to the 200-day EMA at $22+.

Trade-wise, I think our best bet is to wait until ANDE makes it out over yesterday’s close ($16.19) to take the lesser risk shot at this one.   Besides getting us in closer to the top of the congestion zone, $16.20 just happens to be the residence of the short term 61.8% Fibonacci retrace line— my strongest fib for support/resistance.  Funny how these things work out, no?   Again, no, not really.  

Also important — earnings are scheduled to be released on May 6th, so we may have a nice little run here where we can play amidst the “Sentient Programs” and then either hit “the EMP button,” or stay on, depending on our risk tolerance and affinity for Wachowski Brothers metaphors.   If the market holds up, I wouldn’t be shocked to see Mr. Anderson make a nice move to the 200-day EMA along with every other beaten down bird in the House of Morpheus.

So keep Mr. Anderson in mind tomorrow and next week, especially if you feel the urge to take the blue pill at some point whilst consulting with your wisest urinal shadows…

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