CF Industries Holdings: A Play In The Fertilizer Patch

By | October 8, 2019

CF Industries Holdings (CF) is in the fertilizer business. It produces nitrogen and ammonia based products for distribution worldwide.

Over the last three months the stock price has been consolidating in a symmetrical triangle pattern. Recent lows have reinforced the idea of trend line support positioned in the $47.50 area and today price is peeking above its 50 day moving average.

The slow stochastics indicator has bounced at and above its oversold zone, suggesting the start of some upside momentum. Chaikin money flow is trending higher towards positive territory and this suggests renewed buying interest in the stock.

There are two ways to make a long trade in CF Industries. The first is to wait until a triangle breakout above the down trending resistance line. A second trade idea is to enter a position after the next upper candle close. The second strategy being that there would be an ironclad stop loss level sitting just below the $47.50 level. This provides a low risk/ high reward long entry point.

Positioning stop loss levels is often more important than deciding on entry points. Remember that money management is the prime directive.

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