By Gareth Soloway on May 3rd, 2010 12:20pm Eastern Time
While the markets are posting a solid day of gains, agriculture stocks continue to be weak. These stocks, along with the metal stocks have shown significant weakness in the last couple months. This is counter intuitive as supposedly the economy is roaring again. Part of the issue is the dollar, the other portion is most likely a leading indicator that the economy, minus government massive spending, is not as strong as Wall Street believes.
Potash Corp. (NYSE:POT) is down in the last two months from a 52 week high of $128.42, now trading at $108.23. It is trading down 2.05% today. The Mosaic Company (NYSE:MOS) has not seen its 52 week highs since January, even though the markets have soared to new highs since then. The stock is trading at $50.50, down from a January high of $68.28. Lastly, Monsanto Company (NYSE:MON) is a sight to see. Truly an ugly chart, well off the January highs of 87.06, now trading at $63.00. It has had only a handful of up days since January and the monthly and weekly charts look like a breakdown is in play.
While the downside move in the agriculture plays is obvious, the real key here is to understand what this is telling us about the future. The dollar continues to be strong and that is a negative for these stocks, however, the bigger picture revolves around the tell tale signs on the economy. If these stocks cannot rally, demand is slowing. If demand is slowing, eventually Wall Street may see this and a fall could occur.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
To get more in-depth analysis, along with exact entries/exits, swing trades, and scalp trades, join our Research Center or Intra Day Stock Chat NOW and join the ranks of the Pros!
Comments