Trade Ideas Newsletter 05/19/2016

EMN is at the beginning of a significant breakdown

Based on the previous analysis in EMN, traders should ensure that their portfolio can handle increased risk from an additional trade. Also check to make sure that EMN increases diversification of your current portfolio. Lastly, smart traders check how a new position relates to not just their account, but the current market action as well. For example, take a look at the S&P 500. Is it moving higher or lower? Has it recently moved through a key resistance or support level? Be sure to match up your trading actions on EMN in relation to the overall market movement.

CHART

Right now the custom sentiment levels, measured by Traders For Wealth, indicate an increasingly negative bias toward EMN. In addition, the price action in EMN has been moving down as well. This could be a strong sign of an impending breakdown. Traders should view this as a very bearish trade and make sure it matches up with the overall market, and their current portfolio.

Eastman Chemical Company (EMN)

Eastman Chemical Company (Eastman) is a specialty chemicals company that produces a range of advanced materials, chemicals and fibers. The Company operates through five segments: Additives & Functional Products (AFP), Adhesives & Plasticizers (A&P), Advanced Materials (AM), Fibers, and Specialty Fluids & Intermediates (SFI). In the AFP segment, the Company manufactures chemicals for products in the coatings, tires, consumables, animal nutrition, crop protection and energy markets. The A&P segment focuses on producing intermediate chemicals. In the AM segment, the Company produces and markets its polymers, films and plastics. In the Fibers segment, the Company manufactures and sells Estron acetate tow and Estrobond triacetin plasticizers; Estron natural (undyed) and Chromspun solution-dyed acetate yarns and cellulose acetate flake and acetyl raw materials. The SFI segment offers products, such as acetyl chemical intermediates, olefin derivatives, specialty fluids and alkylamines.