Crunching the fundamentals, Barron's says LyondellBasell (LYB) could return more than 20% in a year; of course, they did not really look at the charts for clues. Let's see if these two charts support the fundamental story.
In the daily chart, above, we can see that prices have trended lower the past 12 months. Prices are below both the declining 50-day and 200-day moving average lines. Even with the rally from the January low to the April high, the 50-day moving average line did not cross the 200-day line. The On-Balance-Volume (OBV) line showed some minor improvement in January and half of February, but then the OBV line moved lower, telling us that sellers have been more aggressive. Prices made a peak in late April but a bottom reversal signal has yet to develop.
In the weekly chart of LYB, above, we can see the pattern of lower highs since late 2014. Prices are below the declining 40-week moving average line. The OBV line is edging lower on this timeframe and the Moving Average Convergence Divergence (MACD) oscillator is below the zero line and bearish. The $70 area has become a support zone for LYB but sometimes support breaks down when longs lose their conviction. Traders should be on the defensive as the third quarter approaches.