Albemarle Does Not Appear Able


Every stock has a story to tell and I try to listen to each one. Some stocks blare out their stories and you quickly know what is going on. Others take a while to get to know, much like some people.

Albemarle is a specialty chemicals producer. This type of company doesn't draw a lot of attention. After a couple of years of being on my primary watchlist, I was considering removing it. It wasn't regularly generating the kind of movement I like to see. However, there are many different ways to make money from trading.

I noticed something about the stock that got me thinking. In my February 15th, 2013 newsletter, I stated “The interesting thing about ALB’s chart is it makes a move, then goes into a sideways pattern for a few weeks. It has happened several times in the past year, and there are many similar periods in previous years.”

On February 13th, ALB had just jumped again, but the following day produced a lackluster narrow-range day. Sensing it was going into another sideways trading range, I focused on a calendar trade for ALB, using the March and June 65 calls. I set a specific profit target for the trade. ALB did fall into a lethargic trading range and the calendar trade hit the profit target on March 1st, 10 trading days later.

ALB made another sharp move in early June. This time it was downwards. Again, it went into a sideways, nondescript trading range.

After the close on July 17th, Albemarle announced earnings. The stock dropped at the open, but recovered somewhat by the end of the day. The 6 trading days since have been weak, with the possibility of ALB violating recent support.

Albemarle missed earnings estimates by only $0.01, but was off on revenues, continuing its recent track record. So this was not a one-time event that might be quickly fixed.

ALB could once again be entering a sideways period. But the numerous down-close days with above-average volume strongly suggests institutions are unloading their positions.

If ALB breaks below recent support around 61.5, and volume is strong, then ALB should make a good short trade. In a market like this, where buying just seems to come in from nowhere, short trades are higher risk. I would target a small move. Just above the April low, maybe around 58 to 58.5, would be a reasonable target (61.5 to 58.5 would be a 4.9% gain if it worked). If ALB put in a solid reversal, on either the daily or 30-minute charts, I would get out of any short trade.

For the more adventurous a bear put spread could be considered.

In today's full newsletter, I cover exact entry conditions, profit and stop-loss targets on the ALB trades. I also cover a very high probability credit spread trade, a quick-profit bull call spread, and a breakout candidate that bears watching.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, type in www.markettamer.com/seasonal-forecaster

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2013 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.

Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.

As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.

Related Posts

 

MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.