{"id":19149,"date":"2021-11-16T07:30:11","date_gmt":"2021-11-16T12:30:11","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19149"},"modified":"2021-11-16T07:30:11","modified_gmt":"2021-11-16T12:30:11","slug":"this-niche-sector-is-primed-for-a-breakout","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/this-niche-sector-is-primed-for-a-breakout\/","title":{"rendered":"This Niche Sector Is Primed for a Breakout"},"content":{"rendered":"

Inflation seems to be front and center these days…<\/p>\n

It’s on the news, your Twitter feed, and maybe even in your conversations over dinner.<\/p>\n

Right now, it’s scaring everyone – investors and consumers alike.<\/p>\n

There’s also a growing sense that rising prices will continue, because the ones with the most power to affect change, aren’t so worried…<\/p>\n

Both the government and the Fed are showing no signs that they understand what’s happening or let alone care enough to set policy that’ll help.<\/p>\n

That’s because setting policy to rein in inflation would exchange short-term growth for future growth… and doing so would mean forgoing their short-term political points.<\/p>\n

But inflation is now a global problem… and it’s all interconnected.<\/p>\n

However, investors can get ahead of this trend and take matters into their own hands.<\/p>\n

One of the best ways to do that is to be positioned at the epicenter of the inflation trade – the commodity sector.<\/p>\n

But the problem is commodities move fast, and when most people think about commodities, their go-to is either gold or energy.<\/p>\n

Gold had a noticeable breakout this month, something Jeff Clark has been pounding the table on<\/a>… at a time when it wasn’t popular to do so. His latest piece on gold gives a great framework on what to look for in the short term… as well as long term.<\/p>\n\n\n\n
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Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Another area within the commodity sector that looks primed for a breakout is the fertilizer and agricultural chemicals space.<\/p>\n

We here at Market Minute<\/em> showcased a similar sector a few months back, recommending TiO2 producers like Tronox Holdings (TROX<\/a>). These companies produce chemicals for things like paint and industrial dyes.<\/p>\n

TiO2 is not sexy, but since then, TROX is up 40%.<\/p>\n

And now, this chart of fertilizer prices has me thinking that the stocks within this space are positioned for some outsized gains as well…<\/p>\n

\"Chart\"<\/div>\n

This fertilizer price index consists of things like urea, potash, and nitrogen. Like I said, these aren’t sexy commodities. Yet, fertilizer prices have nearly tripled<\/em> this year…<\/p>\n

So, when people look around and see the prices of coffee and wheat more than doubling since last year, it shouldn’t come as a surprise – nothing grows without fertilizer.<\/p>\n

Typically, investors interested in this space may want to get broad exposure to ETFs like VanEck Agribusiness (MOO) or iShares MSCI Global Agriculture Producers (VEGI).<\/p>\n

But that’s a sub-optimal way of getting exposure to this particular trend. That’s because these ETFs hold a portfolio of stocks in the broader agri-business sector and diversify away the outsized gains available from buying shares in the fertilizer producers themselves…<\/p>\n

Right now, the companies I like most in the fertilizer and agricultural chemical space are ScottsMiracle-Gro (SMG), Corteva (CTVA), and FMC Corp. (FMC).<\/p>\n

FMC in particular has a very bullish<\/a> chart structure and may have the most value right now… Especially since it was actually down 19% YTD until November 1.<\/p>\n

But its latest earnings report may have reversed investor sentiment… and set up a floor for price levels.<\/p>\n

Take a look at this chart of analysts’ upper and lower price targets for FMC…<\/p>\n

\"Chart\"<\/div>\n

First, it shows FMC has retaken its 200-day moving average<\/a> (MA) after its latest earnings report and hasn’t given up any gains. That’s encouraging because stocks tend to pull back from bullish earnings reports – at least a little.<\/p>\n

Secondly, the most bearish<\/a> analyst estimates have FMC trading at $105 per share. It’s currently right at the bottom of that range and poised to break higher.<\/p>\n

Given these developments, I fully expect this stock to trade above $125 within the next 12 months.<\/p>\n

Regards,<\/p>\n

Eric Shamilov
Analyst, Market Minute<\/em><\/p>\n

<\/p>\n

Reader Mailbag<\/h2>\n

How do you trade commodities? Do you mostly follow gold and energy, or do you trade the niche sectors?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Inflation might be here to stay…<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[13],"newsletter-type":[],"ticker":[],"class_list":["post-19149","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-eric-shamilov"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=19149"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19149\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19149"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19149"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19149"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19149"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}