While never at the top of the list of cutting-edge companies to name-drop at a cocktail party, global cement makers nonetheless look ready to build a foundation for future gains.
Cemex ADR (CX) has been correcting lower since the middle of 2014 and has retraced two-thirds of its price advance in a channel. The decline has also traced out what chartists call a measured move or an A/B move. The first leg of the measured move takes CX down from near $13 to $8. An upward correction unwinds over several months and is followed by another leg lower. The second leg travels approximately the same distance in dollars as the first leg (see chart below).
Vicat S.A., chart below, has been correcting lower from what could be a double top formation. Prices are approaching the major uptrend line drawn from the 2012 low for Vicat. A successful test of the uptrend line can be a relatively low risk place to go long using a sell stop below the trend line.
French cement company Lafarge, below, has made a broad consolidation pattern between $50 and the mid-$60s for nearly two years. The On-Balance-Volume (OBV) line is overall neutral but shows a bullish bias on rallies. A breakout to new highs would give us an $80 price target (the height of the pattern added to the breakout point).
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Give your portfolio some credit and see which of these materials companies gets your interest: BHP Group, Dow Inc. or LyondellBasell.
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