POT is trading at $110.39, off 4.8% from the high set yesterday. The move gives POT a lower high than the $126.47 set on Jan. 11. There was a lower low on Jan. 29, so in combination, it certainly looks like a downtrend.
Support runs from about $106.50 down to $102.50, giving the price an easy 5% run down the ski slope. Right below that support level is a congestion running from June to October 2009 that might limit further downside profit.
But for now, despite the macd bull signal, I see it as a with-the-trend directional bear trade.
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Potash Corp. Saskatchewan.
Just love those High Beta stocks.....where's POT going from here.....Has the downtrend been reversed Tim.....?
ReplyDeleteCertainly enough to set the heart pounding, isn't it.
ReplyDeleteI could make a case for today's move being a bounce off of the upper reaches of support -- like if the price were starting to form a triangle of some sort, for example -- but I think the higher probability move is to a lower low, down below 100.
That argument would make today a wonderful point for opening a bear position. Although I always find it extraordinarily hard to go bearish on a massively up day, even if the support and resistance argue for the bear case. Just human nature, I think.