Not many stocks this year are in the minus column for the year, but those that are may get weaker still if and when the broader market were to correct a few percentage points.  One company who’s stock recently seemingly couldn’t get out of its own way is agricultural chemicals firm Agrium Inc. (AGU), year to date lower by 11%.  At its peak for 2013 the stock was up by 15.50% in late January, but has since sold off just about 23%, closing last Friday May 24 at a new year to date closing low.

To be sure, Agrium Inc. (AGU) isn’t the only agricultural chemicals stock that looks prone for lower prices, Monsanto Company (MON) too has arrived at a critical support line which if broken could accelerate the stock lower by a few percent at the very least.

Through the lens of a multi-year chart looking back to late 2008, the stock continues to trade in an up-trend, but with last Friday’s close this up-trend is getting tested once again.  Any further weakness in the stock thus would snap this up-trend and cause a change in posture for the stock.

agu weekly

Last Friday’s closing price near the $89 mark also coincides with an area that acted as resistance from March 2012 until July 2012.  Furthermore, the area around $89 also represents a 61.80% Fibonacci retracement of the entire rally from June 2012 up to January 2013, making this an important confluence zone area both on the daily chart as well as on the weekly chart above.  Should the stock fall below there on a daily close it will enter somewhat of an air pocked as there isn’t any real support until roughly the $75 area.  On the upside, if the stock can overcome the $92 level it would be a first indication that the confluence support zone around $89 did its job.

AGU daily chart

 

 

 

 

 

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