Boston, MA 09/16/2013 (wallstreetpr) – Mosaic Co (NYSE:MOS) (Closed: $45.99, Up: 3.63%) opened flat on Friday and pointed towards a sedate session but jumped up in the midsession on the news of a Russian Tycoon selling his stake in Uralkali. A sale could eventually lead to averting a possible collapse in the price of Potash. The price action created a very bullish candle which engulfed the range of the previous 3 days. The volume jumped at 11 million against an average of 7 million.
The stock had a parabolic rise from the 2005 bottom of $12.50 to $163.25 by the middle of 2008. But it took only 5 months to lose almost all the gains in 2008 and it finally found the bottom at $21.94. The attempt to recovery was in clear 3 legs, emphasizing the nature of the rally as a corrective one only instead of an impulsive one. Carnage like that in 2008 requires a long time-correction to create a proper base from where long term reversal can be attempted in the absence of a V-shaped recovery. 5 years in that respect is a very short time.
The completion of an A-B-C move has the bottom of B as the first target and the price achieved that when it nearly touched the 2010 bottom this year. Currently the price is finding support in the historical demand zone of $37 – $40.
The current rally from the 2013 bottom of $39.75 would get many bulls interested but the point of concern comes from the fact that the entire rally is contained perfectly in a rising channel, which is more common in corrective moves. The bulls must take the price above $46.75 – $47, the upper boundary of this channel to gather the actual bullish momentum. Otherwise the bears can nullify all the effort of the bulls.
Investors could accumulate this stock near $32 – $37 on dips or take some aggressive position if it manages to sustain above $47.
