| | Never Be On The Wrong Side Of Another Historically Repeating Market Cycle Or Trend… |
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| | | Dear ,
Welcome to this week's Seasoned Stocks Trade of the Week where we show you one trade you should be looking into for the week. We dive deep and take a look at how this stock has behaved historically during this time period. This is information you are going to want to read. We do this every week for you, so keep an eye out for another one next week. Now, let us get into today's report.
This week we focus on a very strong seasonal period for CF Industries Holdings, Inc. (CF), which manufactures and sells hydrogen and nitrogen products for clean energy, fertilizer, emissions abatement, and other industrial applications worldwide. Its principal products include anhydrous ammonia (had to Google this one!), granular urea, urea ammonium nitrate, and ammonium nitrate products. The company also offers diesel exhaust fluid, urea liquor, nitric acid, and aqua ammonia products; and compound fertilizer products with nitrogen, phosphorus, and potassium. It primarily serves cooperatives, independent fertilizer distributors, traders, wholesalers, and industrial users.
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Below you will see that the past 200 Trading Days of the stock has looked strong, with +55% growth in the stock price. It could be overweight at the moment and might continue to be discounted, but let's dive into more information...
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Below you will see some seasonal stats from the Seasoned Stocks software for CF Industries... Over the past 15 years, from July 29 to August 20, the stock has gone up 93% of the time. The Average Move Up is +6.13% over this 17 day trading period. Another excellent stat is the Profit Factor is 60.8, which means that for every $1 lost, it has made $60.80. This is a suburb risk vs reward metric.
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Heads Up...Earnings are coming soon! Just a guess, but the reason that CF has moved up is likely a run up into earnings, and potentially follows through thereafter. But, please don't be naive to think this will happen again, the market has a mind of its own, so don't blindly trade without fully understanding the risks and follow your trading plan.
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Below, you will see some annual stats for CF. If you are trying to make a bullish directional trade, there are some very nice High Points historically speaking. From a High Point perspective we want to see 5-10% + moves. If you want to create some sort of bullish credit spread trade, then you can assess the historical ranges, price reversions and volatility of the stock during the given time period.
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Below, you will see that the Technical Sentiment widget for the consensus of multiple indicators is saying that the Monthly time period is a Buy. The Weekly time period is saying Neutral. And the Daily time period is saying Sell. At this moment, they are saying indecision to me personally. If I add all 3 time periods, it comes up to: 24 Sell 29 Neutral 23 Buy ---all in all, it's ever so very slightly leaning to the Sell-side at the moment of this writing.
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Below is the CF Industries Holdings stock analysis based on the TipRanks Smart Score which is derived from 8 unique data sets including Analyst recommendations, Crowd Wisdom, Hedge Fund Activity, Media Sentiment and multiple Technical stock factors. The Smart Score is a quantitative, data-driven rating system and does not include human intervention. As you can see it's considered on the higher end of Neutral, 'potentially' rolling over to a more Bullish outlook if sentiment improves.
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| | | Below you will see on the Calls-side options for the August 29, 2021 expiry, that there's an significant Open Interest cluster of 5,781 contracts that stands out at the 55.00 strike level. There's absolutely no guarantees, but this level has a slight edge to be reached or tested in many situations. Based on where CF is currently trading, at the time of this writing, it's ~ $47.00 per share, 'if' the stock moves up to the $55.00 level over the next month, then that's almost a +17% upside move in the underlying stock. If one were to trade options, and that scenario plays out, that could allow for a much higher ROI% potential than simply buying the stock. |
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Let me preface something, there's a gajillion permutations and combinations of ways to approach the markets and trade a chart technically---ok, that said, here's an interesting tip…
Renko charts, originating in Japan, are probably the most useful for "staying with a trend" and not getting whipped around by shorter-term volatility. The message here is that when the Renko chart turns from red to green, you want to strongly consider getting long--- here's one addition to consider; add alignment with volatility stops (see green dots below price/red dots above price--- you can see my settings in upper-left of chart).--as of this writing, per the chart below, the Bears are in control of the trend in CF Industries Holdings (CF):
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One last little 'indicator' tip, this is by no means the Holy Grail, but the StockCharts Technical Rank (SCTR) attempts to separate the wheat from the chaff for chartists. Relative strength is an important part of a successful trading or investing strategy. Based on the wisdom of John Murphy, SCTR allows chartists to compare the technical strength of one stock against all the stocks in its peer group. That said, here's what it's saying at the time of this writing:
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Let's wrap this up, technically I'm not long or bullish CF. From a fundamental perspective, I'm rather neutral. Long story short, the stock is on my radar. Hopefully you've found this seasonal information useful, and it's fairly simple to see the logic behind a solid seasonal tendency in CF Industries Holdings (CF) that's potentially setting up. Please remember--- Always focus on risk first, do your homework, and have a solid trading plan that you can adhere to before trading anything.
To learn more about more seasonal information on CF Industries Holdings (CF) and other seasonal opportunities, please click on the link below to access the Seasoned Stocks software:
https://seasonedstocks.com
Trade Smart,
Chad Shirley
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