Bought them at 53.40 and it instantly plunged to 49, should I short them? Or do you think it goes back up? Thanks
No, I would not short MOS. First, there is a pending offer from Vale for a merger and the price is probably going to be at least book value which is a lot more than $50 range. Second, fertilizier stockes like POT, MOS, MON, ITP usually have a run after summer starting in september. The most volatile moves happen in the beginning of the year and the fall. I know that the idiot analyst covering this stock said fertilizier prices are going down and downgraded this stock. Do not listen to analyst. I think the biggest move this stock made in '07 when it went from $20 to $160 was when the analyst downgraded the stock.
There was only a rumor about a buyout and people that bought the rumor and are still holding deserve what they get. Almost all buyout rumors turn out to be false. This was set up perfectly into options expiration. Vale has officially denied any interest in buying a fertilizer company.
The 53.00 price level provides a signal to watch for short entry, but confirmation of the signal doesn't occur until the break through previous support (and trend line) at 52.82 (chart attached).
No pending offer. thats why it fell. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=au7x0NNZvtH8