MON Chart – June 24, 2009

I charted Monsanto (MON) around lunchtime while it was trading $75.89.  (Disclosure, I’m long 100 shares with a covered call at July $80).   Monsanto announced earnings today which were positive overall and it started the day up, but then came the information of some of their changes to how they run their business.  Apparently the Street doesn’t like it.  This is what the chart tells me:

• MON hit resistance at the point of its 10, 20 and 50 day moving averages after it fell below those moving averages a few days earlier.
• MON is at the bottom of it current trading channel
• MON bounced off previous support around $75.00
• Williams %R remains in oversold where it doesn’t tend to stay for long periods

Opinion = I’m staying long my MON position for now.  I expect MON to shake off some of its current funk as it drifts lower for a few days and then I expect it to find better footing soon.  If the $75.00 range breaks support I could see MON trading down to $70.00 quickly.  At $70, I’ll have to consider buying more if that area shows support.