Bullish on CF Industries

I consider the overall pattern of CF Industries (CF) to be bullish, with higher highs and higher lows. This is one reason I want to set up on the buy side. The second reason is the fact that price is currently above both the 200- and 50-simple moving averages, which is considered technically bullish.

By looking at the chart, I could see that some of the swings in price looked very similar to each other, so I measured them to make sure. There was one prior decline of $19.10, and another that was $20.10. I compared these prior swings with the recent swing down into the $214.47 low, which was $18.96. By projecting 100% of both of the prior swings from the Jan. 30 high, the support levels illustrated with the red lines on the chart showed us the potential support in this stock. These projections also happened to overlap the 0.618 retracement of the Dec. 24, 2012, low to the Jan. 30 high, and a 0.50 retracement of the Nov. 8, 2012, low to the Jan. 30 high. All these price relationships created what I call a Fibonacci price cluster zone between $211.78 and $214.33....184 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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