Agrium Poised for an Upside Breakout

 | Nov 06, 2017 | 3:27 PM EST
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Agrium (AGU) is now poised for an upside breakout as prices have played "chicken" with a sustained breakout above $110. We want to trade AGU from the long side but let's review the charts and indicators so you can understand my thinking behind this trade.

In this daily bar chart of AGU, below, we can see that prices are above the rising 50-day moving average line and the rising 200-day line. The price action over the past seven to eight weeks looks like a bullish triangle which is poised for an upside breakout. The On-Balance-Volume (OBV) line has been neutral the past seven weeks but it is up from its early July low and suggests a modest level of aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator is pointed down but could easily turn higher for a fresh outright go long signal.

In this weekly chart of AGU, below, we can see that prices are above the rising 40-week moving average line. Prices have stopped at $110 recently and also in late 2016. The weekly OBV line has been moving sideways the past four months but the MACD oscillator is very bullish.

In this Point and Figure chart of AGU, below, you can see a breakout to a new high on this chart at $110. There is also a potential price target of $122.

Bottom line -- aggressive traders could go long AGU at current levels risking a close below $105 with an initial upside price target of $122.

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