The backstory: A month ago, I told you about The Mosaic Company, a fertilizer maker that was really beaten down. It was coming off a bottom, lagging other agricultural input producers, because its facilities sustained some damage from Hurricane Irma. I took a position Oct. 2, when it looked like it was going to move, and made a little money on it, but sold it because Mosaic was about to release earnings. I don’t want to hold anything through earnings unless I already have a big gain on it; even then, I only hang onto a little piece of my total position.
The big picture: Mosaic reported good earnings on Tuesday, and the stock popped up a nice 8.5 percent. They’ve got good guidance, reported that all their hurricane damage is under control, and they’re making some acquisitions; MOS broke resistance and gapped up from $20.84 at Monday’s close to $22.34 Tuesday on big volume that pushed it through resistance at $22.09.
How I’m playing it: I am looking to go long MOS on anything over $22.69, looking for a target of $24.83. My stop would be a close below today’s bar, so $21.92. With the agriculture sector as strong as it is, and MOS beating analysts’ estimates by a wide margin and building on positive news, this is one stock I can see making a big move going forward.
Petra Hess runs PetraPicks.com. She is a technical swing trader and long-term investor in domestic and Canadian stocks and ETFs. At the time this article was published on RagingBull.com, she had sold her previous position in MOS in advance of earnings and was looking to go long again under conditions described above.