Is Monsanto in for a fall?
Could Monsanto (MON) be in for a fall? Has it over promised and under performed? Monsanto is a leading global provider of technology-based solutions and agricultural products for growers and downstream customers, such as grain processors and consumers, in the agricultural markets. The combination of its herbicides, seeds and related genetic trait products provides growers with integrated solutions to more efficiently and cost effectively produce crops at higher yields, while controlling weeds, insects and diseases. Its base business, led by Roundup and coupled with the latest tools in biotechnology, genomics and molecular breeding.
First let me say that the stock has a great following on both Wall Street and the general investing public. Let's look at the facts. Deep discounting of prices by competitors and wold wide depressed demand in agricultural products have caused depressed sales and earnings figures.
Barchart has a 72% technical sell signal and the stock is trading below its 20, 50 and 100 day moving averages. The stocks recent price of 48.01 is well below its 50 day moving average of 56.39. The stock lost 14.02% in just the last 5 days alone. The 14 day Relative Strength Index is only 27.87% and tanking.
One technical note is that short interest is increasing and volume is falling. A bad short term sign.
At this time I'd sell present positions or place a short term short but be prepared to cover if the price trend reverses.
Jim Van Meerten is an advisor to Marketocracy Capital Management who uses his model portfolios not only to manage their mutual funds but also their clients Separately Managed Accounts. You can read his blogs about those model portfolios and investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.
Disclosure: Jim Van Meerten through Marketocracy Capital Management has an interest in the stocks mentioned in this blog.