That Smell: Fertilizer Stocks Are Getting Smelly

• Posted by Greg Harmon
• on September 21st, 2011

The winds of change are blowing in the market and they are bringing with them the stench of manure. One by one the high flying fertilizer stocks are starting to breakdown from their lofty perches and are looking like a steaming pile of you know what. Lets take a look at 3, CF Industries Holdings ($CF), Intrepid Potash ($IPI) and Potash Corporation of Saskatchewan ($POT).

CF Industries Holdings, $CF, Weekly

CF Industries Holdings, $CF, was a short trade idea from two weeks ago but it is now exceeding my expectations. After breaking through support at 162 it rocketed lower Wednesday stopping at the resistance from February at 152. It is out of the Bollinger bands on the daily chart but from the weekly view above the move lower looks to just be getting started. The Relative Strength Index (RSI) is just hitting the mid line and the Moving Average Convergence Divergence (MACD) indicator is about to cross lower. Buckle up for the ride lower with the next support near 140.

Intrepid Potash, $IPI, Daily

Intrepid Potash, $IPI, broke lower from a consolidating pattern between 32 and 35 over the last three weeks, as shown in the daily chart above. Wednesday it also broke below the extended rising trend line support and continued lower. With a falling RSI and a MACD that has already crossed lower it has more downside in it and support next at 29.

Potash Corporation of Saskatchewan, $POT, Weekly

Potash Corporation of Saskatchewan, $POT, looks like it may be the next one to get stinky. Bouncing along the 13 month support/resistance line at 50 as shown in the weekly chart, the cards are aligned for a break lower. The RSI is pointing lower and the MACD is growing more negative, like the last few times it has approached support, but this time the 20 week Simple Moving Average (SMA) is heading for a cross lower through the 50 week SMA as well. It may continue to consolidate for another few days or a week but keep an eye on the 50 level as there is a lot of room below it with the first support at 46.

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