Trade of the Day: Potash Corporation of Saskatchewan (USA) Is a Breakout Candidate –

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Shares of materials company Potash Corporation of Saskatchewan (USA) (NYSE:POT) are higher by just shy of 10% for the year and have likely frustrated plenty of traders of late. But a look at the charts with some perspective reveals a bullish pattern in multiple time frames, and thus one that in my eye that has much potential for higher prices in the near to intermediate term.

The materials sector of stocks of the S&P 500 as represented by the Materials Select Sector SPDR (NYSEARCA:XLB) exchange-traded fund for 2017 remains in a firm bull trend, which, in recent  months, has been aided by a bid in the energy commodities. While certainly not all materials stocks are created equal, it is nice to see a general bull trend in the underlying sector.

POT Stock Charts

Click to Enlarge

Moving averages legend: red – 200 week, blue – 100 week, yellow – 50 week

For some perspective on shares of Potash itself, let’s look at the multiyear weekly chart. Here we see a stock that, after topping out in the year 2008, has since only managed to make a series of lower highs. POT stock has largely been basing since early 2016 through this lens and while still in the larger picture down-trend, from a momentum perspective it is certainly beginning to look more promising.

No cigar in this time frame just yet to be sure, but the grizzly bears on this stock would be wise to watch how the next few weeks or months unfold for a trend change from intermediate term bearish to intermediate-term bullish does look increasingly likely.

Click to Enlarge

Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 day

Over on the daily chart, things look decisively more

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