The following is technical analysis for Potash ( POT ). The chart you see is from weeks ago before Potash first closed back over the 10 day moving average causing this huge move up in share price to $80 today. I will have a new POT Chart tonight showing this analysis but due to stockcharts.com regulations, you can't take snaps during trading hours.
Potash Technical Analysis December 17, 2008
As you can see, Potash closed back over the 10 day moving average several weeks ago just like previous times and exploded to the upside. It was important not to be early because there were several times where it almost closed over the 10 day, but failed, only to take out the previous lows. The bounce off of $47.54 was a huge up volume move and buyers were chasing Pot into the close. This was the signal that some of the shorts were starting to cover. The next day, we got confirmation of a close over $57 which was the 10 day moving average. While this was a huge $10 move in two days....it was just the beginning of Pot's move which has happened two other times in the past several months.
Potash has made a major move so I would be cautious about buying above $75. Pot has closed back over the 50 day moving which is very bullish, so pullbacks to the 10 day moving average should be bought. POT has resistance from $81.54 - $85 and if these levels are cleared the next major resistance level is the Election High of $94.98. Pot has support at the $70 level where it stalled before making this last move higher as well as the 10 day moving average which is at $65.37. The 10 day moving average will be moving higher each trading session that goes by so keep that in mind. $47.54 will turn out to be a long term bottom for Potash and we all know, as evident in the past few weeks, the biggest moves come right after a stock bottoms.
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