Make Your Move on Huntsman Corporation (HUN)

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Shares of chemicals maker Huntsman Corporation (NYSE:HUN) at one point this year were lower by about 60%, and while the performance of Huntsman stock still is miserable year-to-date, price action off the August lows has HUN in a much more constructive posture.

Beat the BellNaturally, active investors and traders should be looking to capitalize.

Tactically, given the August washout, traders trying to buy HUN stock right now aren’t as much at risk of trying to catch a falling knife, which is nice from a risk management perspective.

The sharp V-shaped reversal in the September/October period for the materials sector of the S&P 500 has put many of its constituent stocks in a position where the path of least resistance looks to be at least marginally higher into year-end or early 2016. But after that, we’ll likely see important lower highs (versus 2015 highs) before resuming their downtrends.

Not coincidentally, this posture fits the typical year-end road map for stocks quite well, where after some potential weakness in the first half of December, stocks still favor another push higher into the new year, particularly in a year preceding a U.S. presidential election.

Huntsman Stock Charts

Looking at HUN stock from a long-term angle, we see that the September lows coincided with a retest of a multiyear horizontal line of support. Also note that as a result of Huntsman’s acceleration in selling over the summer months, the September lows led to an extreme oversold reading in the MACD momentum oscillator, which remains oversold. Combined with the big-picture support area, this argues for a somewhat further bounce higher in Huntsman stock.


huntsman stock weekly chart
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Looking at the daily chart, we see that after the late September lows, HUN stock formed an important higher low in late October after its earnings report, which followed a next rally that pushed the stock past the red diagonal line of resistance.

Since early November, Huntsman stock has been tightly hugging its yellow 50-day moving average and further consolidating the bounce off the September lows in a bullish wedge type of pattern. While we must respect both sides and realize that HUN shares could break in either direction, the path of least resistance given the constructive price action off the September lows looks to be higher.

Huntsman stock daily chart
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Active investors and traders could look to buy Huntsman stock on a break-and-hold above the $13 area with an upside target at $15, while any severe bearish reversal must be respected.

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Successful trading and investing starts with a plan. Download Serge’s essential trading plan, The Essence of Swing Trading e-book. As of this writing, he did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/11/huntsman-corporation-hun-make-a-move/.

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