CF Industries Is Poised for a Rally
A close look at the stock charts for this clean energy firm offers a clear trading strategy.
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CF Industries Holdings (CF) is a manufacturer of hydrogen and nitrogen products for clean energy, fertilizer, emissions abatement and other industrial applications. I have not reviewed the charts since May 1, 2023, and the charts look poised again for another rally.
Let's check.
In this daily bar chart of CF below, I can see that prices have moved lower over the past 12 months in a wide, downward sloping channel. Prices have recently rallied above the 50-day moving average line and above the 200-day moving average line. The slopes of both moving averages are still negative. The On-Balance-Volume (OBV) line shows us a decline from September into late July. The Moving Average Convergence Divergence (MACD) has crossed back above the zero line for an outright buy signal.
In this weekly Japanese candlestick chart of CF below, I can see an improving setup. Prices are crossing above the 40-week moving average line. The weekly OBV line has been moving sideways the past twelve months and shows the beginning of strength the past couple of months. The MACD oscillator is below the zero line but crossing to the upside for a cover shorts buy signal.
In this daily Point and Figure chart of CF below, I can see a potential upside price target in the $91 area.
In this weekly Point and Figure chart of CF below, I can see a potential price objective in the $97 area.
Bottom line strategy: Prices could chop sideways for a few weeks before extending their advance. Traders should be patient buyers and wait for a dip to the $76 to $75 area before probing the long side of CF. Risk to $71.
$91 and then $97 are my price targets for now.
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