The American chemical company that was founded as a spin-off from DuPont, Chemours Co (NYSE: CC) seems to be poised for a price surge as per its latest charts.
Bullish Indications
#1 Downtrend Channel Breakout: As you can see from the daily chart, the stock has been trading within a downtrend channel during the past few months. This is marked in the daily chart in purple color. Currently, the stock has broken out of the downtrend channel. Once the stock breaks out from a downtrend channel, it has the potential to move further up.
Daily Chart – CC
#2 Price above MA: The price is currently above the short-term moving average of 50-day SMA. This is a possible bullish sign.
#4 Bullish RSI: The daily chart shows that the RSI is above 50 and moving up after reaching near oversold levels.
#5 Bullish Stochastic: The %K (blue) line of stochastic is currently above the %D (Orange) line in the daily chart.
This is a possible bullish indication.
#6 Downtrend broken: The weekly chart shows that the stock has broken out of the prevailing downtrend and started a new uptrend. This is a possible bullish sign.
Weekly Chart – CC
#7 Strong Stoch: The stochastic is currently moving up and the %K line is currently above the %D line in the weekly chart. This usually indicates bullishness.
#8 Bullish MACD: The MACD line is above the signal line in the weekly chart as well, indicating a possible bullish bias.
#9 Oversold RSI: The RSI is currently near oversold levels and moving up, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase half the intended quantity of shares of CC at the current price of $15.28 and the rest if the stock crosses above the previous pivot high at around $17.20.
TP: Our target prices are $25 and $30 in the next 4-6 months.
SL: To limit risk, place stop-loss at $12.60. Note that the stop-loss is on a closing basis.
Our target potential upside is 45% to 96% in the next 4 to 6 months.
- Entry at $15.28: For a risk of $2.68, our target rewards are $9.72 and $14.72. This is a 1:4 and 1:6 risk-reward trade.
- Entry at $17.20: For a risk of $4.60, our target rewards are $7.80 and $12.80. This is a 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 6x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the downtrend channel breakout level with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
Tara
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