Sirius Minerals (SXX)

Tuesday, 30th May 2017 15:55 - by Rajan Dhall

One issue I have with the Potash industry at the moment is that prices are in decline. I am bullish macro fundamentals i.e. world population and the need for more fertilizer but much like oil there is a supply glut and this looks set to continue with K+S announcing a new plant in Canada. The other issue may be the FX rates fertilizers are sold in USD with the weak GBP we are attractive so keep an eye on FX movements.

There is an article about the type of product that Sirius produce which can help educate people on their product here: http://www.miningweekly.com/article/polyhalite-an-almost-forgotten-potash-source-back-from-the-brink-2012-08-17/rep_id:3650

Looking at the chart now the good news is that all the higher closes are supported by higher volume and the lower closes look like profit taking days as the volume is thinner. On the chart below I have plotted a moving average on the volume indicator to tell me if the days volume is high. Breaking through 30p looks like it will need some high volume but if it does the 35p area looks like the next value point. The pattern of higher highs and higher lows is encouraging and I believe we could move higher with 50p a long term target as long if the fundamentals remain strong.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.