Its All About the Nitrogen - CF Industries

August 18, 2014 12:11 PM

Since putting in a double bottom at 233 in mid June, CF Industries, $CF, has been making a series of higher lows and higher highs. In the parlance of Technical Analysis this equals a trend higher. This is a change of character for the stock price. What was a long flat channel is now a rising channel. This is now a stock to own purely from the price action.

But the other indicators also back up the story. As the price is clearing the July high in the chart below, the RSI is in the bullish zone and heading higher with a MACD that has crossed up and is rising. These both support the upside in the price continuing. The blue envelope, the Bollinger bands, are also opening up on the top side as it approaches, to allow the move to continue. The center line of the Bollinger bands is roughly equivalent to the 100 day SMA. Notice that during the sideways action the price was below this level but during the entire prior move higher from July 2013 to March it was above this level. The price is also back above the line now.


This move started in May so you might think it is too late to get on board. But one measure of how far it could go is called a Measured Move. This looks at the prior move (from 168 to 268) and projects it higher. This would target a move to 333 by about late February, it if takes roughly as long as the last leg. So there is still a lot of potential in this one.

Get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades.

View Comments (1)

Recommended for You