We've talked about Mosaic (MOS) and Potash Corporation (POT) in previous posts, so let's go ahead and take a look at how CF Industries has traded since its IPO in August 2005.
1. LONG the week of 10.2.06 at $17.91 with a $14.99 stop. Traded as high as $170.97 the week of 6.16.08, but the financial crisis was just beginning to unfold, and it quickly traded back down and through my $97.76 stop the week of 9.22.08. Gain of 406.9%
2. Reversed to SHORT the week of 9.22.08 at $90.78 with a $164.45 stop. Wait, $164.45? Yes. Higher volatility means wider stops in this system. The stock has room to move without generating a lot of false signals. Traded as low as $37.29 less than a month later, then gradually upwards as markets stabilized, and finally past my $71.84 stop the week of 3.23.09. Gain of 19.9%
3. Reversed to LONG the week of 3.23.09 at $72.76 with a $45.63 stop. Traded as high as $109.72 the week of 3.1.10, but stalled out and quickly reversed direction, trading below my $88.27 stop the week of 4.19.10. Gain of 16.7%
4. Reversed to SHORT the week of 4.19.10 at $84.88 with a $102.29 stop. Traded as low as $57.49 the week of 6.7.10, then caught fire and shot straight up through my $82.55 stop the week of 8.2.10. Gain of 0.8%
5. Reversed to LONG the week of 8.2.10 at $84.21 with a $62.02 stop. Traded as high as $153.83 the week of 2.7.11, but has since traded down slightly, closing last week at $126.02. The stop is set at $113.34. Gain of 49.6%
Winning Trades: 5 | 100% | $29.10 avg.
Losing Trades: 0 | 0% | -$0.00 avg.