EOM 6.23.16 Motley Fool Buy List Analysis 2 of 8‏ CF

 

Good Evening,
 

Tonight I begin my individual stock analysis from the Motley Fool Contributors, Buy List for June.  

 

I begin with CF Industries recommended by Neha Chamaria. Here is a link to her previous pick stats featuring a 5.88% accuracy rate.  Neha has some very interesting articles/columns.  Here is a link for more info on the CAPS terminology.

 

OK…time for the routine on how to analyze each company then formulate a game plan on how to make money with them. 

 

Step One

What is CF-CF Industries Holdings Inc., and what do they do?  Here is their profile from Yahoo Finance.

 

Step Two

How did CF perform vs. the SPX in 2016?  Click on link or see attachment
SPX was up 3.39% while CF was down -30.87%.  CF had the worst performance in this group.

 

Step Three

Seasonality from the last two years shows CF dropped in June, rallied in October then dropped going into the end of the year. The default shows five years.  Move the bar to see the two-year seasonality.

 

Step Four

Chart CF for the last year to look for Simple Simon Buy or Sell Signals. Study which indicators worked the best for buy and sell signals-VERY IMPORTANT!

CF Chart Highlights   Note-I am using my swing trading template with 5-10-15 simple moving averages 
1.  Had a 5:1 split in June 2015

2.  Dropped -61.8% since July 2015

3.  Is not trading with consistent correlation to the SPX

4.  Has a multi-month “Descending Triangle” pattern in progress

5.  CMF and MACD Histogram are both negative

6.  No buy signal with RSI or Slow Stochastics

7.  Less than average volume

 

Step Five  Strategy-Set Alerts

1. If price closes over the 15 SMA-long candidate

2. If price hits support of $26.55-short candidate

3. If volume jumps 20-30%

4. If CMF goes positive for two consecutive days-long candidate

5. If MACD Histogram goes positive-long candidate

6. If RSI crosses back up through 30-long candidate

7. If Slow Stochastics crosses back up through 20-long candidate

 

Contact your broker to see if they have shares to short (non-retirement) account

 

Step Six-Showtime

1. Monitor alerts 

2.  Keep Simple Simon Chart front and center

3.  Trade incrementally if/when entering

4.  Only add to positions when price is going in your favor

5.  Calculate target price and tighten stops to lock in profits

6.  Calculate maximum pain-price you will get out of the trade if it goes against you

 

No trading without protective stops!

 

If and when you are stopped out, don’t focus on what you lost.  

Focus on that you were able to keep, to trade with another day

 

Members–when you learn, follow and use these proven steps, 

you will see a difference in your Profit and Loss results!

 

I promised a more-in-depth analysis-you got it!

 

What’s on deck for tomorrow-GILD.

 

Enjoy your evening!

 

DOE

 
When your Vision and Goals are Clear-Results will Appear!
This information is for Educational purposes only.
It shall in no event be construed or interpreted as an offer or recommendation to buy or sell securities of any kind.

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