Saturday, April 5, 2008

Agrium Breaks Down Trend

I've been keeping an eye on Agrium (AGU-T, AGU-N) for quite some time but never actually pulled the trigger. That is, until this past Thursday afternoon. As you can see in the 6-month chart below, AGU broke out of its down trend on Thursday and signaled a buying opportunity for me.

Typically, I would wait until the next day to buy a stock exhibiting such a pattern to confirm that its closing price actually broke the downtrend but my gut instinct told me to get in there (plus work commitments would prevent me from following the market opening on Friday morning). Well, luckily for me, AGU gapped up on Friday thanks to a competitor (and partner) reporting quarterly numbers that exceeded analysts' expectations.

Agrium is a major retail supplier of agricultural products and services in North and South America, a leading global wholesale producer and marketer of all three major agricultural nutrients and the premier supplier of specialty fertilizers in North America through their Advanced Technologies business unit. Agrium’s strategy is to grow across the value chain through acquisition, incremental expansion of its existing operations and through the development, commercialization and marketing of new products and international opportunities.

As mentioned in an earlier post, Agrium also has a 19.6 percent equity position in Chinese specialty fertilizer company, Hanfeng Evergreen.

Interestingly, Recognia's Technical Events Report gave a target price range
of $87.00
to $91.00 for AGU-T after Thursday's close.

StockCharts noted on Friday that AGU-T had a double top breakout
based on their Point and Figure chart pattern (below) giving a
preliminary bullish price objective of $87.

It might be tempting for me to grab some profits before that 'target' is reached so we'll see what the markets do and how I react.

AGU-T Price Range on Thursday, April 3rd: $63.50 to $67.50 (Close: $66.75).
It closed yesterday at $70.01.

No comments: