Sensient Technologies Corp. (SXT) was upgraded yesterday to a "B" buy rating from a C+ rating by TheStreet.com's Quant Ratings quantitative service. Regular readers of Kamich's Korner know I periodically look at stocks that combine strong fundamentals or quantitative readings and have positive charts. The best of both approaches. Let's check out the charts of this producer of flavors and fragrances this morning.
In this daily bar chart of SXT, below, we can see an important turn to the upside on SXT appears at the end of July. Prices successfully retest the early May lows and volume surges. In August prices rally above the flat 50-day moving average line and close above the still-declining 200-day line in late August. This month the slope of the 50-day average has turned positive and the line is close to crossing above the 200-day line for what is commonly called a golden cross, or buy signal.
The daily On-Balance-Volume (OBV) line shows a rise from late July, signaling that buyers of SXT have become more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in early August for a cover-shorts signal and above the zero line in late August for an outright go-long signal.
In this weekly bar chart of SXT, below, we can see a positive picture. Prices are above the flat 40-week moving average line. The weekly OBV line turned upward in May and the MACD oscillator is close to crossing the zero line for a buy signal on this longer-term time frame.
In this Point and Figure chart of SXT, below, we can see the double-top breakout at $75 and the $89 price target.
Bottom line strategy: Bullish charts and a quant buy signal. What are we waiting for? Traders could go long SXT around $75, risking below $71 looking for gains to around $90.