Insights: Bullish Chemical Stocks
Key Points:We have been recommending an Overweight of the Materials Sector, as the reflation trade remains intact, albeit at a more orderly rate. An area standing out in terms of breadth and favorable price and relative strength patterns within the Sector are the Chemicals, ranging from the diversified and petroleum-based to the specialty chemicals and plastics/resins companies. Growing global economic growth prospects and moderate energy prices are the catalysts that have ignited the Group's technical and fundamental stories, along with some fairly sizeable mergers/restructures, e.g., Dow/DuPont and FMC to name a couple.
• Our technical buy list includes: LYB, EMN, ASH, WLK, VVV, MEOH, BAK, SHI, KOP, NEU, NGVT, IOSP, IPHS, HWKN, WLKP, TSE, SCL, and KRA.
• Stocks to accumulate on weakness: BASFY, HUN, CBT, OCIP, ALB, CC, OLN, TROX, VHI, and KMG.
• Bottom-fishing candidate: OCIP.
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Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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