Trade of the Day: MOS Stock Sprouting Bullish Technicals

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Mosaic Co (MOS) — MOS stock rallied 1.7% on high volume on Thursday, as buyers seemed to recognize its potential value after a multiyear decline.

Mosaic is one of the world’s largest suppliers of concentrated phosphate and potash crop nutrients. Shares have fallen along with the prices of agricultural commodities and fertilizer, and been the subject of numerous analyst downgrades this year.

But the highly regarded S&P Capital IQ Equity Research is much more optimistic. Its analysts rate MOS stock a “Strong Buy” with a 12-month price target of $35. They predict fertilizer prices will begin recovering late this year and see strong long-term demand thanks to the growing world population and improved diets.

At the current price, Capital IQ considers MOS stock to be “low risk” due to its broad product mix, dominant market share and low debt.

Turning to the chart, MOS stock peaked just under $90 in 2011 before entering into a long-term bear market. The bearish resistance line drawn from that high (not shown) intersects the chart at about $30, which is just above the 200-day moving average.

A buy from my proprietary internal indicator, the Collins-Bollinger Reversal (CBR), was triggered at the 52-week low of $22.02 in early February. Then, in late February, MOS stock broke above its 50-day moving average and sustained that break by consolidating within a right triangle.

Shares now rest on the bullish support line of the triangle, and buyers rushed in Thursday with MOS stock advancing on high volume. Immediate resistance is at the 50-day moving average at $26.57, and then the 200-day moving average at $29.86.

MOS stock is appropriate for both traders and investors. Traders should look to buy shares at $26 for a six-month trade to $34 and a potential return of more than 30%. Long-term investors could see even higher returns and benefit from the company’s annual dividend of $1.10 per share, which throws off a current yield of 2.9%.

MOS Stock Chart
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Chart Key


Article printed from InvestorPlace Media, https://investorplace.com/2016/06/mosaic-co-mos-stock-trade-day/.

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