RNF is getting hit today and looks to be right at support. They don't report earnings until mid-March and the run-up to the distribution is over. If $43 doesn't hold, the next support could be the 50 dma around $42 and then the next level after that is where it broke out from a triple top around $40. There are just my unprofessional reads on what the pictures look like, there are also many other moving averages that traders look at, like the 8 day and 20 day moving averages. The knock on technical analysis is that these "support" levels are not guaranteed -- they hold if they hold. But they can at least tell you where the exit and on ramps are -- they just don't tell you the direction of the traffic. The RSI level is 48 and the MACD lines are turning down from the highs. To me, this looks like it could fall further and break through some of those lower supports.
If RNF should bounce at its current support, then one has to be careful that it doesn't form a "head and shoulders" pattern. The right shoulder is the early move in Jan, the head is the move to $49, and the left shoulder would be if it reached the same level as the right shoulder and then turned down. The "head and shoulder" theory suggests that a stock would decline by the distance between the neck and the head -- in this case, that's about 6 points ($49 head minus $43 neck = 6) meaning that there is risk that RNF could fall to $39 if a h&s develops. I would note that the $39 level is the bottom channel if you connected a line from the bottom going back all the way to August. Again, some doubt the utility of technical analysis, and it has its weaknesses, but it in the case of RNF, there really isn' t going to be any fundamental news for several weeks.
I note that I missed the runup in RNF but the high RSI number and the fact that the chart was going "parabolic" (which is never sustainable) made me wait and miss 7 or 8 points (from $41 to $49), but missing a runup can cause an investor to make a mistake by buying at the wrong time, thinking that the stock is going to keep going straight up. Sometimes that does happen, but those are risky trades for me. I have made too many of those kinds of mistakes and I would rather save my capital for other opportunities should they present themselves.
I like the ag sector, especially if the drought conditions occur again, but I don't want to invest on the high side and have to watch the stock consolidate for several months or weeks.
mark....excellent message (good for you)....at this time some of the bigger players in the agriculture sector are concerned about 'the size' of the Brazil corn crop (which may be about 200 million bu. more than anticipated)...and 'a possible shortage of seed' to plant this years corn crop in the U.S.,....
Nitrogen (N) prices will probably react to the amount of 'total planted corn acreage' that is planted in the U.S. this spring (???)....! $tagg...!