The Andersons, Inc. (NASDAQ:ANDE) received increased attention this week due to the ongoing crisis in Ukraine. ANDE is expected to gain after it emerged that the war in Ukraine would disrupt wheat markets.
Ukraine is a major producer and exporter of wheat. With the war raging on, it will be impossible for wheat production to continue in the foreseeable future. The country is also not able to operate in the Black Sea meaning that any wheat that may have been in silos will also not be exported.
The shocks are expected to benefit agricultural companies such as The Andersons. Shortages create an increase in prices. Last year, the global prices of wheat were projected to edge upwards. The supply shocks make it certain for the prices to move up.
The market discounted this news leading the share price to gain significantly in the past three weeks. This week, the price hit a high of $50.40. The stock has since then pulled back to $43.44 as details of an insider sale emerged.
The Andersons faces resistance at $50
Source: TradingView
Technical analysis indicates that ANDE maintains a bullish trend with the MACD above signal and trending upwards. Moving averages MA 10 and MA 20 remain above MA 50. The RSI at 62.62 has been oscillating around the SMA 14, with the next turn expected to be upwards.
The stock price can, therefore, be expected to maintain the bullish momentum. However, it is likely for ANDE to find resistance at $50.
Summary
The Andersons is projected to benefit from wheat shortages created by the war in Ukraine. The share gained in the week, hitting a high of $50 but has since pulled back to $43.44. While the bullish trend will be sustained, the stock will continue facing resistance at $50.
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