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NFTRH+; A Specialty Chemicals and Materials Company Near a Buy Zone

Once again, the title is purposely left vague to keep the subject company under wraps.

Cabot Corp. (CBT) is one that I know fairly well and have highlighted and traded in the past. The recent quarterly was good and the company appears stable in its business segments. In its chemicals/materials specialty, it is one that I think would benefit if Trump’s fiscal ‘reflation’ ever gets here.

I want to note again that NFTRH+ is highlighting more opportunities for buying than shorting because the market is in an uptrend. It is also at growing risk and so NFTRH+ presents ideas with that caveat. The rest is up to the individual and his or her macro viewpoints. I do not particularly like this market, but its trends are what they are.

On to the chart; all we need is a daily to show the setup. Post-earnings, CBT has declined harshly for a test of lateral support (green zone) and the SMA 200. Has it broken a Rising Wedge (blue) or dropped to the bottom of a channel (black dotted)? You may know how I feel about Wedges; anyone who saw this one and got bearish was blown up on the upside breakout. And now, turnabout being fair play, committed bulls are getting creamed.

A test of the SMA 200 can include some grinding and stabs below, so keep that in mind. I think it is an opportunity to give the company a try as long as the broad market remains intact or CBT holds support. RSI is oversold to a level that has seen prior lows along CBT’s post-2015 uptrend.

cbt

Buy Target: 52s to 53s.

Sell Target: Undetermined, but the trend (defined by the SMA 200) is up so a ‘new high’ would be ideal.

Stop Loss: Below the December low, which was 50.15, for a more tolerant stop or below 52 on a daily close for a less tolerant one. I tend to be less tolerant in this market.

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.