LyondellBasell Industries (LYB) is one of the world's largest producers of versatile plastic resins. A sell side firm started its fundamental coverage of the company with a sell recommendation. Let's check out the charts and indicators.
In this daily bar chart of LYB, below, we can see that prices have broken down in June. LYB quickly broke the 50-day moving average line in June after a number of successful tests of the line in April and May. Prices continued to weaken in June and broke the 200-day line. LYB tested the December low and rebounded slightly.
The On-Balance-Volume (OBV) line shows weakness the past 12 months and made a new low for the move down in June. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.
In this weekly Japanese candlestick chart of LYB, below, we see a mixed picture. This chart shows a recent lower shadow and potential hammer bottom pattern but with no confirmation yet. Prices pushed down to retest the November/December lows of late 2021.
The weekly OBV line is pointed down as traders are still more aggressive sellers while the MACD oscillator has turned lower.
In this daily Point and Figure chart of LYB, below, we can see a downside price target in the $65 area.
In this weekly Point and Figure chart of LYB, below, we can see that the software is projecting the $55 area as a potential price objective.
Bottom line strategy: LYB could try to hold in the $85-$90 area but the risk is for still further declines in the weeks ahead. Avoid the long side of LYB.
