Don't Ignore This Chart!

This Ag Stock Appears To Be Bottoming

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It's been downhill for a long time for CF Industries (CF), but finally its downtrend was broken and volume has been pouring into the stock at these lower prices.  CF's short-term strength has taken it to a 50 week SMA test for the first time since August 2015.  What it does from here will likely determine it's future direction.  Let's take a look at the chart:

CF's SCTR has surged 35 points today, which ranks as the largest up move among all large cap stocks.  Note that this is the first time in a year that CF has boasted a SCTR ranking over 20 as well.  During this process, CF has broken its downtrend line and is currently trying to print a weekly close above its 50 week SMA - all on very solid volume.

The key for me is how CF reacts technically to its next pullback.  The rising 20 week EMA should now hold as support and that's currently at 25.36.  Stay tuned and....

Happy trading!

Tom

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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