Monsanto Company (MON) was in the news this morning with this story. That doesn't seem to be moving the stock today but that doesn't mean this isn't an interesting situation. Here is what you need to know.

When evaluating Monsanto, I think you need to look at the long-term view. The stock is more or less unchanged over the last 6 months which may turn off some of the shorter-term traders. However, look at what develops when you switch to a longer-term picture.

Chart Courtesy of Thomson Financial

Here we see a multi-year uptrend that initially peaked in January. This was followed by a consolidation period and then a rally attempt in June. The shares did push to a new high on that effort but the momentum was short lived.

Boiling all this down to its most simplistic components leaves us to two distinct phases. The first is the rally phase the lasted into the first couple of weeks of this year. The second is the consolidation since then. I would say this overall pattern is constructive as long as the stock holds above this support zone. A period of "rest" after a strong run is often a good sign as it gives new buyers a chance to find their way to the stock.

If I could change anything about this situation it would be the sentiment picture. Specifically, I would like to see some signs of skepticism. As it stands now, there are hints of mild optimism. The majority of analysts are in the "buy" camp and put/call ratio is relatively low. Given the strong long-term performance though, it would be hard to say this is out of line.

In other words, we have a strong stock, so it is not surprising to see some optimism. The "ideal" situation now would be to see some skepticism start to creep in during this consolidation. With that in mind, I am adding this stock to my agricultural stocks Watch List that I discussed here - Watch List Report - Potash Corp. of Saskatchewan, The Mosaic Company, Terra Industries Inc, and Agrium Inc.