Lithium play Albemarle Corp. (ALB) is set to report quarterly earnings after the close of trading Wednesday. Let’s review the position of the charts and indicators.
In this daily bar chart of ALB, a specialty chemicals company, I see some subtle bullish clues. Prices are in a downtrend from November and trade below the declining 50-day moving average line and below the declining 200-day line. Trading volume has increased since the middle of February and could be a sign that a change of ownership has developed — from weak hands to stronger hands. The daily On-Balance-Volume (OBV) line shows weakness from the middle of February but also could be stabilizing in recent days. The 12-day price momentum study in the lower panel shows higher lows since December even though prices have made lower lows. This difference between the price action and the indicator is a bullish divergence. The pace of the decline has slowed as this can foreshadow a rally in the weeks ahead.
In this weekly Japanese candlestick chart of ALB, below, I can see a mixed picture. Prices are trading below the declining 40-week moving average line but prices are trying to hold in the area of the 2022 low around $180. Trading volume has picked up sharply in recent weeks. The weekly OBV line looks like it is holding steady in March and April. The MACD oscillator is bearish.
In this daily Point and Figure chart of ALB, below, I can see a potential downside price target in the $158 area. A trade at $170 or lower is needed to refresh the downtrend.
In this weekly Point and Figure chart of ALB, below, a price target in the $89 area is shown.
Bottom line strategy: I have no special knowledge of what ALB will tell shareholders Wednesday evening. With the downside price momentum in ALB slowing from December I would sooner expect a rally rather than further declines in the days ahead.
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