Key Points: Urea prices fell by more than $70 in late September A strike is helping to support potash prices Some analysts are raising 2009 earnings forecasts Highlighted stocks include AGU, CF, MOS, POT and TRA

Fears that fertilizer companies could be losing pricing power sent their shares tumbling late last week.

The primary cause was a sharp drop in urea prices. A report published last Thursday on Farm Futures revealed a $70 decline in Black Sea prices over the previous 2 weeks. (Ammonia prices were weaker as well.)

Urea is a key ingredient used in fertilizer. Traders are concerned that the recent drop is an early signal of slipping demand for fertilizer. Any weakness would call into question fourth-quarter and 2009 profit forecasts for Agrium (AGU), CF Industries (CF), Mosaic (MOS), Potash of Saskatchewan (POT) and Terra Industries (TRA).

It is possible that some farmers are choosing

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With the market up so much of late, and a much needed pullback eventually coming, what are some stocks/sectors we can focus on, and start to make shopping lists? I would focus on stocks that have shown strength in the last 2 week rally, and are firmly over their 50 day moving average; and seem to have no major headwinds. This would exclude some names such as Google (GOOG), which is struggling with the 50 day moving average, and might be weak due to this, or a name like Akamai Technologies (AKAM) which has its own set of issues.

Let’s break it down into sectors - where I will give you a list of choices and then give you what is on my shopping list. A pullback of any of these names to their 50 day moving average would be an enticing entry point.