Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Archive for April 2008

POTASH base on base

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With the global Green Revolution buckling under pressure of bio-ethanol, drouth, and wheat and rice shortages, Potash is in the green lately.   Let’s look at the chart as a near-text book example of base-on-base growth:

At point A, the stock sagged along with the rest of the market in January, carving out a cup with handle base. It made a decent advance before creating a new base, what we’ll identify as a Double Bottom base, as it made a lower low at Point B.  The base buy point would be just above Point C.  

Note how as the stock advances it dances along the 5 day moving average (Point D).  That is as strong a ‘tell’ as I can find that momentum money is chasing a stock. (Sell stops below the 5 day moving average might be a good trade idea.)  Point E is an intermediate price rejection and reversal. Look for a new base to form and support at the 50 day moving average (way down under $170.)





Written by heyercapital

April 24, 2008 at 9:08 pm