Brean Capital technical analyst Frank Longman sees 20 percent upside in the charts of fertilizer stocks Agrium Inc. (USA) AGU 1.59%, CF Industries Holdings, Inc. CF 1.99% and Mosaic Co MOS 0.85%.

“All yield at least 3.77%, inflation break-evens have signaled that ‘deflationary death spiral’ is unlikely in Q2 and barbell approaches continue to pay off,” Longman explains.

For CF Industries, Longman believes the stock will close above $43.50 before it closes below $28.50. With the stock currently trading around $32, that trade represents 35 percent upside versus only 11.3 percent downside.

Longman recommends a similar approach to Agrium. He sees upside to $103 in the short-term and advises a stop under $83. That setup represents more than twice as much upside as downside from the stock’s current level. He notes that patient investors might want to wait for a pullback to the $85 level before buying.

Finally, Longman recommends…

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