Trading Idea - Is Potash close to Resistance?

Published on Wednesday, 25 August 2010 05:52 Written by Christian Paolinetti

New York, August 25th (TradersHuddle.com) - Shares of Potash Corporation of Saskatchewan Inc. (NYSE:POT) are trading very close to calculated resistance at $153.29 with the current price action closing at just $149.11 placing the stock near levels that make it difficult to buy.

Potash Corporation of Saskatchewan Inc. (NYSE:POT) produces potash, phosphate, and nitrogen for the agricultural and industrial industries worldwide. The Company operates in Canada, Chile, the United States, Brazil, and Trinidad.

Potash's current stock range is defined by current calculated support defined at $106.56 and by the resistance level at $153.29, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Potash, as the stock is well above support, however, as the stock pulls back towards $106.56 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $153.29 then traders will get an opportunity to enter Potash stock by establishing a position as the stock moves to a higher range.