In addition to the technical update below on Potash One Inc., The Globe and Mail featured Potash One Inc. here: EYE ON EQUITIES: STOCKS THAT SHOULD BE ON YOUR RADAR SCREEN
The Commodity Supercycle Report www.investingsuccess.ca
Malcolm Bucholtz B.Sc, MBA Analyst Technical Trading Note
December 16, 2008
Potash One Inc. (TSX: KCL) - Chart Looks Compelling ...
Resource and Commodity stocks of all descriptions have been badly mauled in the recent global market meltdown and Potash One (TSX: KCL ) has been no exception. For shareholders who have endured this meltdown, the experience has no doubt been painful. But, opportunity and vindication may now be at hand. Prices of various potash equities appear to be basing and posturing for a breakout. And rightly so. In April 2008 when I first issued my buy rating on Potash One, I noted the following:
- Each year in India and China, 40 million people attain "middle class status". With increased prosperity comes a greater demand for an improved diet with more vegetable and meat protein. This drive to prosperity has seen vast tracts of agricultural land swallowed up in order to build factories, assembly lines and chemical plants. China has now given up so much agricultural land it is on the verge of becoming a Corn importer for the first time in its history. China is already a big importer of Soybeans which along with Corn is vital for livestock and poultry feed so that enough pork and poultry can be produced to feed the masses. Problem is, China cannot start importing all its foodstuffs. It has got to produce more and grow more from the agricultural land that remains. This will require fertilizer being applied to farm land.
- In India, food production has not kept pace with food demand. Shifting weather patterns are affecting the traditional monsoon rains that have been so vital to the Indian traditional farming methods. India too has got to squeeze more productivity out of its land through the application of fertilizer.
- With Europeans still refusing to accept genetically modified grains (GMO), Brazil has stepped up to the plate to supply more non-GMO grains. In addition the Brazilians are major producers of ethanol from sugar cane. The combination of non-GMO grains and a booming ethanol industry means Brazil is under pressure to increase its agricultural output.
Has any of this changed? Not a chance. People have got to eat. It's just that simple. And with 6 billion people on the planet, agriculture related stories will be front and center in the years to come.
Potash One had positioned itself right in the heart of the Potash action in the Province of Saskatchewan with its 97,400 acre Legacy Project which immediately adjoins the Belle Plaine potash solution mine operated by The Mosaic Company (N: MOS). Belle Plaine has been in continuous production since 1964 and from all appearances, the Potash One Legacy property shares the same general geological characteristics as the nearby Mosaic Belle Plaine solution mine. A 43-101 Technical Report prepared in June 2007 suggests this property could host an indicated resource of 36.8 million tonnes and an inferred resource of up to 360 million tonnes of Potash. Potash One is well positioned with $27 million in working capital and engineering firm SNC Lavalin has now been retained to commence work on a pre-feasibility study.
Investors who have already established a position in Potash One should take immediate steps to add to their position to average down their cost base. Investors looking for excellent investment opportunities in these beaten down markets right now should give some serious thought to establishing a position in Potash One (TSX:KCL).
Take a look now at the following charts which show without doubt that opportunities in the agricultural nutrient sector are now at hand.
Price action on both Mosaic Co. and Potash Corp has crossed above the 50 day moving average. RSI has now moved above the critical "50" mark. The Wilder DMI in both cases is about to deliver a buy signal.
As price action on the large Potash players continues to form up, Potash One will follow suit. Price action on Potash One is very, very close to crossing up ad through its 50 day moving average. RSI is very close to crossing up and through the critical "50" mark and the Wilder DMI is setting up to deliver a buy signal.
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