Ag Stock CF Industries Has What It Takes to Grow

 | Jan 11, 2017 | 3:39 PM EST
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CF Industries Holdings  (CF) has a nice-looking chart pattern and indicators confirming the price strength. I would continue to buy this name.

Let me show you what I mean with the charts and indicators.

In this one-year daily bar chart, below, you can see how CF has made a saucer-like bottom from July through early November. In early November prices started to respond on the upside with a close above the 50-day moving average line and the 200-day moving average line. The accumulation of CF shares started back in June and July and August with the improvement in the On-Balance-Volume (OBV) line.

The Moving Average Convergence Divergence (MACD) oscillator made its low in early July but it was not until early November that it moved above the zero line and has stayed bullish. It looks like CF is early in its turnaround so the risk should be lower on new longs. I would go long with a stop below $30.

This longer-term weekly chart of CF, below, is also shaping up nicely. CF is above the flat 40-week moving average line and the MACD oscillator is above the zero line for an outright go long signal. 

My upside target for CF based on this pattern would be $45.

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