I Recommended Eastman Chemical: How's It Doing Now?
Here's when traders should add to longs.
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I looked at the charts of Eastman Chemical EMN on April 1 and recommended that "Traders could go long EMN on a pull back into the $98-$96 area. Risk to $91. The $134 area is my price objective."
Let's see how that recommendation is progressing.
In this daily bar chart of EMN, below, I can see that prices pulled back into our buying zone in the $98-$96 area. Trading volume has declined as prices retreated which suggests that investors have largely stayed with their positions. Heavier volume would imply that investors decided to become sellers.
The On-Balance-Volume (OBV) line dipped a little in April. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal.
In this weekly Japanese candlestick chart of EMN, below, I see two patterns evolving.
The first pattern, which is more important, is the base pattern. Prices have made twin lows in the $70 area and EMN has rallied to trade above the rising 40-week moving average line.
The second pattern is a possible top reversal pattern that looks like a turn sideways. The weekly OBV line shows a pullback into April and the MACD oscillator has narrowed in recent weeks. EMN may see a sideways $95-$102 trading range before renewed gains.
In this daily Point and Figure chart of EMN, below, I can see a price target in the $134 area. This is the same price target as shown back on April 1.
In this weekly Point and Figure chart of EMN, below, I can see a price target in the $134 area.
Bottom line strategy: Traders who went long EMN in the $98-$96 area should continue to hold, risking to $91. Add to longs on gains above $104. The $134 area continues to be my price target for now.
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