Three Reasons Why We Ditched Our Swing Trading Position In MOS Stock

In a market full of broken stocks, mosaic (MOS) looks relatively normal. So why go out? Here are three reasons why we should keep our swing trade in the MOS stock short and nice.




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MOS stock shows the scent of early success

The MOS stock has been on our radar for a while. At the end of 2020, it went on a run reminiscent of its strong move from 2006 to 2008. But as strong stocks often do, MOS took a breather for a while through incorporation.

When we saw a follow-up day in the market on December 15, MOS stock was still ticking the time below the 50-day line. (1). That quickly changed. A week later, it broke above its downtrend and moved above its 50-day moving average for the first time in over a month. (2). It also broke through 40 resistance zones from November (3). Finally, test the support at the 21-day moving average (4).

By contrast, the Nasdaq Composite Index started its current project below the 50-day line around the same time. Market indicators showed a temporary bottom on January 10th. But as they struggled, MOS stock continued to trade tightly.

We added the MOS stock to SwingTrader with a trio of positive actions. Strong price gains through resistance, RSI moving to new highs with price and volume increase (5).

Why sell if it holds up well?

We took our first third win at Mosaic the next day. It was a strong movement in the open that faded as the day progressed (6). The S&P 500 and Nasdaq Composite hit resistance at the 10-day lines at this time.

But MOS stock is still rising. We took our second vacation two days later with 5% gains. (7). It ended up about 25 cents off its peak, and both the Nasdaq Composite and the S&P 500 cut their Jan. 10 lows that day.

Our final exit was the next day to protect our gains while overall indicators worsened (8).

So, with Mosaic clearly performing better than the Indexes, why not just stick with the winner? Here are the three reasons behind this:

First, this is swing trading. As a focused trade, you might view the downward movement as a natural pullback to the buy point. But we are looking for quick wins and are careful not to overstay our welcome. We don’t want to risk holding a stock if it still needs time to consolidate.

Second, the market has recently preferred to take quick profits. We prefer to take our first two-thirds strong while the arrow is moving up and then, when appropriate, give the remaining space. The past year has made it even more significant with several sudden failures, reduced supply and continued sector rotation.

Finally, the weak market. So far in 2022, we’ve had success in some counter-trends like energy, fertilizer, and shipping that have gained in a weak market. But a weak market often takes everything in the end. Your average hitting suffers when fewer winners materialize, winners make fewer wins while increased volatility leads to more losses, more frequent, or both. At the end of the day, you may feel frustrated if your hard work doesn’t translate into progress. (Please watch the video attached to this article for an interview on “The Mental Game of Trading” with Jared Tendler.)

Like fighting a bullish wave, you can spend a lot of energy against the direction of the market. For now, we’re going to swerve a bit and wait until our efforts have a better chance of succeeding.

More details about previous trades are available to subscribers and experience specialists at SwingTrader. Free trial versions are available. Follow Nielsen on Twitter at Tweet embed.

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