A sell. This company makes all sorts of wonderful things like Roundup, Agent Orange and a lot of “engineered” seeds, such as draught resistant corn. On that basis it should , perhaps, be a buy but the chart points in the other direction. There is a very nice wedge, complete as is, which must be either a 5th wave or a C. In this case a C is the only possibility so we will go with that.
Another B-wave. Sorry to bother the reader with yet another B-wave, but the sheer numbers are what support the overall bearish outlook and , amazingly, they all more or less peak at around the same time if measured over a month or two.
This one is exceptionally clear as can be seen from the stylized A-B-C in red. Further more it corrected just a little over 62% and found resistance 4 times at the lower trend-line of the past ten years or so. We already have some overlap making if quite unlikely that the pattern will develop in anything more complex.
To stick with the “agricultural complex” another peek at Monsanto supports the bearish outlook. To date this company has not been able to recoup even a minimum of 38% of it’s losses into 2009! Check out such funds/etf-s as COW or MOO if you own them.
Short term MON could go a little higher, perhaps to $88 but after that it does not look good, see also a previous blog for a different count.
Monsanto looks a lot like Microsoft, both have an extended consolidation period at the lower end of their range and both have underperformed much to the surprise and chagrin of their respective investors who , no doubt, thought it was a slam-dunk. For Monsanto this is all the more surprising since peak-oil is fast finding its counterpart in peak-food and half the world is Googling Malthus to find out what that fellow had to say about the matter a few hundred years ago. I think the chart is very instructive in what it has not done. If there was any truth in any of this it is rather remarkable that the stock has only regained about $20 to date after a drop of $100 . This has been dead money and given the many ambiguities the chart presents it may just be smart to step aside.