Roof Leaker To Watch: Agrium (AGU)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Agrium ( AGU) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Agrium as such a stock due to the following factors:

  • AGU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.6 million.
  • AGU has traded 88,602 shares today.
  • AGU is trading at 2.11 times the normal volume for the stock at this time of day.
  • AGU crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on AGU:

Agrium Inc. produces, retails, and distributes the crop nutrients, crop protection products, seeds, and agronomics primarily in North America, South America, Europe, and Australia. The company operates through two segments, Retail and Wholesale. The stock currently has a dividend yield of 3.2%. AGU has a PE ratio of 16.4. Currently there are 7 analysts that rate Agrium a buy, 2 analysts rate it a sell, and 11 rate it a hold.

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