This almost feels foreign - taking a partial position off in a very large move; it's almost like spring 2008 again. Mosaic (MOS) had been increased to our #1 stake late last week as the stock scraped $30 Thursday and Friday. With the stock now up to low $38s in a matter of 1-2 sessions, in a market that can stab you in the back within minutes, I'll shuffle off some profits and reduce the stake from 5.8% to 3.9% of the portfolio. As the chart I put up this morning showed, the stock is SO oversold that even after this enormous 25%+ move, we still have upside to the upper $40s before any technical resistance is even sniffed. But that's old fashioned chart talk - the open question nowadays is where is the hedge fund resistance? Who knows what hedge fund is lurking in the weeds ready to cough up millions of shares. I assume they have done most of their dirty work until later in the year but who really knows. Just in case another case of hedge fund "dismembering" returns soon we'll lock in about 1/3rd of our gain with a very quick gain.
I put some of this money into peer Potash (POT) which has been lagging and has a similar chart. Potash is up to a 5.3% stake. Recall earnings are October 23rd here... expectations should be very low considering how impaired the stock has been. I still find the commodity/global growth space with the best potential for short term gains as long as hedge funds don't have inventory the margin clerks demand. Hence I want to maintain exposure for at least a bit more. Remember, commodities in fall 08 are like banks in spring 08 - hated, disliked, disgusting - but oversold bounces will create massive gains in a short amount of time. Before they are thrown to the garbage bin again in a few weeks ;)
I'll maintain the bullishness I noted this weekend until S&P 1030s/1040 or so where our first tests begin. Still running with little hedges on the short side since the market is grossly oversold, although less so then when we entered the day. A ton of earnings tomorrow and our friends from Cupertino, CA will probably determine our fate here in the next few days.
Long Mosaic, Potash in fund; long Mosaic in personal account
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