Opinion on  Potash Corp. of Saskatchewan Inc. (POT)     Sector: Basic Materials  >  Industry: Non-Metallic Mining
Potash Corp. of Saskatchewan Inc.

Potash Corporation of Saskatchewan, Inc. (PotashCorp) engages in the production and sale of fertilizers, and related industrial and feed products in North America. The company manufactures and sells solid and liquid phosphate fertilizers; animal feed supplements; and industrial acid, which is used in food products and industrial processes. It also produces nitrogen fertilizers, as well as nitrogen feed and industrial products, including ammonia, urea, nitrogen solutions, ammonium nitrate, and nitric acid. PotashCorp’s primary customers for fertilizer products include retailers, dealers, cooperatives, distributors, and other fertilizer producers. It sells purified phosphoric acid directly to consumers of the product. The company was founded in 1953 and is based in Saskatoon, Canada.
Let's apply the concept of selling pops and buying dips to one of the strongest momentum stocks of the past few years, Potash Corp (POT, T.POT). Here is the exercise for you to do.

Step 1 - print out a one year chart of POT.
Step 2 - define the trend lines. Draw a line across the bottoms made mid August and mid November and let it carry forward.

Notice how the market ran away from the trend line in December and January and then suffered a strong pull back to the trend line late in January.

Now, do the same thing for the last six months, draw a line across the January low and the low of the pull back in mid March. Let that line carry forward to the end of the year.

Again, notice how the pull back from the April strength came back to the trend line by the end of May. The market again ran away from the trend line in June and has now pulled back as of Thursday.

Does this mean that the stock will bounce higher from here? Nothing is certain, but the probabilities are favorable.

POT has paid a dividend of $0.10 per share.

1. T.POT
Potash Corp trades on the TSX as T.POT and the NYSE as POT. It broke down from a falling top and with a break of the long term upward trend line on Wednesday. I think there is a very good chance that the stock has seen its highs and is now likely to move lower in the months to come. A short on it, or a purchase of a Put option with some time to expiry, is a strategy worth considering. If the stock comes back to close above $230, I would consider the trade a bust and get out.

http://suprastock.blogspot.com/2009/07/3-stocks-on-buffetts-w...