Since early July 2010, the agriculture sector has lead the major stock market indexes higher. Most other sectors did not begin to rally until the Federal Reserve Bank announced it’s quantitative easing program in late August 2010. The leading agriculture stocks have all been steadily advancing higher until today. Is today’s decline just an options expiration hiccup or is this the start of a major correction for the agriculture sector?
Potash Inc. (NYSE:POT) is the agriculture stock that most traders follow closely. This stock has soared higher by more than 50.0 points since mid-December 2010. Today the agriculture giant is declining by $6.53 to $183.39. Potash stock still remains in a strong daily chart uptrend, therefore, today’s downward action could be just an options expiration shakeout.
Mosaic Co. (NYSE:MOS) is another leading agriculture stock that made a new 52 week high yesterday. This stock has rallied higher by more than 40.0 percent since mid-December. Today the stock is declining by $3.72 to $85.28 a share. Mosaic stock was getting extended and overbought on the daily chart, therefore, a pullback was in order. As long as Mosaic stock remains above the $81.25 level which is the daily chart 20 moving average the stock is still technically in a strong position and in an uptrend. At this time the decline today is nothing more than a minor pullback.
Monsanto Co. (NYSE:MON) is a leading agriculture stock that is declining sharply with the rest of the sector, however, the chart pattern on this stock is much worst than Potash and Mosaic. Today, Monsanto stock is declining by $3.52 to $71.58 a share. The stock is also forming an outside bar on the daily chart which is very bearish. Today’s move lower puts price below the previous 10 trading session lows. Monsanto stock will have some minor short term daily chart support around the $70.00 and $67.00 levels.