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The recent surge in Mosaic Company’s (MOS) share price appears to be losing steam, with increasing speculation that a correction may be on the horizon. This recent price increase followed analysts’ consensus on February 18, which predicted a potential 4.4% uptick in the stock. At that time, twenty institutional analysts recommended a BUY, setting a price target of $48.33. The stock has since exceeded this target, approaching the upper band of the price range at $65.00, with the lower band set at $38.00.
In February, Mosaic signed a share repurchase agreement with Goldman Sachs, allowing the company to buy back $400 million of its common stock on an accelerated basis. Following this deal, 80% of the shares involved were delivered to the company on February 28, leading to a 23.5% increase in MOS’s share price. Since then, the stock has seen a slight correction as a double top pattern begins to form.
This double top pattern is not yet fully formed. Wednesday’s bounce has kept the neckline intact, with the 59.86 resistance level serving as the immediate hurdle to the upside. If this level is broken, the stock could potentially rise to 64.46, the high from March 7. Breaking this barrier could bring the January 11, 2010 high of 68.39 into play.
Conversely, if the neckline at the 56.13 support level is broken, it would complete the double top pattern and trigger a corrective decline. The initial target would be 53.18, with further support at 47.56. If the decline continues, additional targets could be 43.13 and 40.47, the low from October 27, 2021.