CF Industries Poised for Major Upside Breakout

 | Oct 17, 2017 | 3:28 PM EDT
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CF Industries Holdings, Inc. (CF) has made a large bottom formation since February and now prices are poised for a major upside breakout. CF looks like it has a lot of upside potential so let's take a look at the charts and indicators.

In this daily bar chart of CF, below, we can see a saucer-like or cup-like bottom formation since February. Prices declined from $37 down to $26 where they re-based from March to August. A rally got in gear from late August bringing prices back up to retest the February highs. CF is above the rising 50-day and the rising 200-day moving averages.

The On-Balance-Volume (OBV) line has strengthened since August, signaling more aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and crossing to the upside for a fresh outright go long signal.

In this weekly bar chart of CF, below, we can see a much larger base pattern going back to early 2016. Prices are above the rising 40-week moving average line. The weekly OBV line has been rising since a March low and implies strong accumulation. The weekly MACD oscillator turned up above the zero line in August for a new outright go long signal on this timeframe.

In this Point and Figure chart of CF, below, we can we can see the uptrend and a tentative upside price target of $42. The weekly bar chart above suggests a longer-term price target of around $50.

Bottom line: Aggressive traders could go long CF at current levels risking a close below $34 looking for gains to $42 and then $50.

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