CF Industries Holdings (CF) is a manufacturer of hydrogen and nitrogen products for clean energy, fertilizer, and other industrial uses. The company is scheduled to report their latest quarterly figures after the close of trading Monday.
Let's check the condition of the charts and indicators.
In this daily bar chart of CF, below, I can see a stock that looks ready to stage a recovery rally. Prices have made a significant decline from late August to March. Prices bounced into April and retested the March nadir. Prices are trading below the declining 50-day moving average line and below the declining 200-day moving average line. The trading volume has declined from March through the end of April, suggesting to me that the retest of the March low was on light volume and I see that as a positive development.
The daily On-Balance-Volume (OBV) line looks like it is making a slightly higher low in April versus March. The 12-day price momentum study shows a higher low from March to April for a bullish divergence when compared to prices making equal lows. A bullish divergence can sometimes foreshadow a price rally.
In this weekly Japanese candlestick chart of CF, below, I can see three lower shadows below $70. This tells me that traders are rejecting the lows and prices are making a bottom. Prices are trading below the declining 40-week moving average line.
The weekly OBV line has been in a decline since early 2022 but that weakness may be ending soon. The MACD oscillator is below the zero line but narrowing towards a potential cover shorts buy signal.
In this daily Point and Figure chart of CF, below, I can see a potential upside price target in the $98 area.
In this weekly Point and Figure chart of CF, below, I can see a possible downside price target in the $49 area. A trade at $79.05 could turn this chart bullish.
Bottom line strategy: I have no special knowledge of what the executives at CF will tell shareholders and analysts this evening, but I think the charts favor the upside in the days ahead. Aggressive traders could probe the long side of CF ahead of earnings. Risk a dollar amount you are comfortable losing. The $98 area is my price target for now.
