Want a stock that’s already in turnaround mode? Hint: It’s not actually in Chicago (March 12, 2015)
Just real quick here, Chicago Bridge & Iron ( NYSE:CBI ). The reason that I want to mention this is because this has been a, lets just say a profound change in character. The stock has been drifting right down along the 50-day moving average. Ultimately, because few of these stocks go to zero, at some point it’s going to breakout and then typically what happens is you get a pullback and a test of the breakout. Then one of two things is going to happen, either the stock keeps going, oops it failed the test, or the stock bounces and starts to move higher.
Alternatively it could just start to drift sideways, but if we’re going to do that then why don’t we just talk about ninety different possibilities? Ninety degrees, eighty-nine, eighty-eight, eighty-seven, etcetera, etcetera; not what I’m doing here. The idea is this though, the stock did breakout and it broke out on volume, so that to me confirms that this is a low, this is a breakout level, and this is now new support.
So if you were looking to get in to this sector this would be a good stock to be buying. I know like Caterpillar ( NYSE:CAT ), a different company but kind of the same industrial sector; Caterpillar ( NYSE:CAT ) just keeps going lower and lower and it keeps getting more and more attractive, right? Well, that could last for a while. The thing about CBI ( NYSE:CBI ) is it already looks like it’s formed a bottom and now the stock is poised to move higher. So I would say even just keep a stop just a little bit below 43.52 and then you can take advantage of this turnaround.
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