The Mosaic Company is the world’s largest supplier of phosphate and potash, but despite its market dominance, it has been stuck in a downtrend since peaking in early 2011. Not only has the cost of potash and fertilizer components fallen dramatically but more competition has been coming online. Both events have hit Mosaic’s margins hard.
However, since this is a cyclical business, the huge run up in 2007-08 has slowly been burned off. The stock is still well off those all time highs, and Mosaic is now positioned briskly walk (but not run) higher.
I like the break of the triangle to the upside, but more importantly, I like the very strong turnover. The MACD is now on a strong (and confirmed) buy signal, and the move up in relative strength is quite impressive. With resistance at the 200 ma just ahead (arrow), Mosaic could stall. This level is near the March highs, so a consolidation may soon be at hand. However, I’ll be watching that pullback for a buy opportunity.
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The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients primarily for the agricultural industry worldwide. The company operates through three segments: Phosphates, Potash, and International Distribution. It owns and operates mines, which produce concentrated phosphate crop nutrients, such as diammonium phosphate, monoammonium phosphate, and ammoniated phosphate products; and phosphate-based animal feed ingredients primarily under the Biofos and Nexfos brand names. The company also produces and sells potash for use in the manufacturing of mixed crop nutrients and animal feed ingredients, and for industrial use; and for use in the de-icing and as a water softener regenerant, as well as fluorosilicic acid for water fluoridation.