The Mosaic Company (MOS), a key player in agriculture known for potash and phosphates, saw its shares drop nearly 2% on Friday. This decline followed a “Sell” rating from analysts who raised concerns about negative cash flow. On Thursday, MOS shares rose above a crucial resistance trendline at $26.48, a level that has been important since November 2024. However, the lack of momentum on Friday pushed the shares back below this trendline. This is the third time MOS has failed to break through the $26.48 barrier. To see any upward movement, the next goals are $27.85 and $28.90. For bullish traders, it’s vital to keep MOS above the $25.39 support level. If this level fails, the price could fall back to December lows of $23.32. We are witnessing a classic failed breakout as MOS could not stay above the $26.48 level. The recent “Sell” rating poses a significant challenge, making it appealing for short-term betting on further declines. Concerns about negative cash flow aren’t new, but they are clearly affecting market sentiment now. Traders expecting a decline might consider buying put options with a strike price below the immediate $25.39 support. If that support breaks, we could see a quick drop to the December 2025 lows of $23.32, which would make those puts profitable. This view is backed by recent data showing a 5% drop in phosphate rock prices from North Africa in the fourth quarter of 2025, continuing a weak trend since last year. On the other hand, bullish traders may view the dip as a buying opportunity, though patience is key. Purchasing call options now is risky until the stock proves it can maintain the $25.39 support. A strong bounce from that level, combined with increased trading volume, would signal that buyers are re-entering the market. If MOS can reclaim and remain above the $26.48 trendline, call options targeting $28.00 or $29.00 would become more appealing. We remember how the stock surged in 2022 due to supply constraints, but the situation is different today. A recent report from a Brazilian agricultural cooperative indicated higher-than-expected domestic fertilizer inventories, which could limit significant price hikes soon. The repeated failures to break resistance suggest that implied volatility may increase as the stock gets squeezed between key levels. Selling covered calls against an existing stock position could be a smart way to generate income while you wait to see if the stock can finally overcome its overhead resistance.

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