Saturday, September 21, 2013

Best Materials Stocks: $DOW, $POT, $ARG

An earlier Motley Fool article covered three materials stocks: Dow Chemical, Potash Corp and Airgas.

The most interesting is perhaps Airgas. The stock bullied past $100 in July after a failed attempt in May. The 50-day MA has offered itself as support, which was used in August.  Technicals are net bullish.


Potash Corp is a little more interesting. The strong gap down following the breakup of the potash cartel should have lead to a new downtrend, but buyers have staunchly defended $29 support. In September, there was a break of $31.56 and a move into the gap.  Traditionally, such moves should see a rapid closure of the gap, but the 50-day MA has so far played as resistance.  There is a convergence of 20-day and 50-day MAs which could lead to a swing trade play (most likely higher).


The Dow is the slow-and-steady of the three. A solid rally has successfully used the 20-day MA as support. The angle of the ascent is not to sharp; the kind of rally which typically finishes with an exponential flourish. The only negative is the On-Balance-Volume 'sell' trigger after two heavy volume days of selling.



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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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