Mosaic (MOS), a heavyweight in the global agriculture sector and a major supplier of potash and phosphate, stumbled on Friday. Shares fell nearly 2% after a new “sell” rating from analysts who called the stock a “value trap.” The main concern cited was negative cash flow, a warning that clearly spooked investors who were looking for a turnaround at the fertilizer giant.
Technically, the timing of this news couldn’t be worse. Thursday saw some promising price action as MOS pushed above the critical resistance trend line at $26.48 – a level dating back to a pivot point in November 2024. While Thursday’s breakout looked significant, Friday’s follow-through was not there. The price was unable to sustain the breakout and has since retreated below the trend line.
Strangely enough, this is the third time that MOS has tried to break above the $26.48 level but failed. This remains the “line to overcome” in the near term for any meaningful technical breakout. If the bulls can find the strength to launch another attack on this trend line in the near future, the next hurdles lie at $27.85 (the high of that nasty red candle on November 5) and $28.90.
On the downside, the bulls need to defend quickly. To maintain enough near-term momentum for another round at the resistance level, MOS must maintain the $25.39 level. If this level surrenders, momentum will likely shift back to the bears, which could pull the price back to the December lows of $23.32.
