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December 14 Chart of the Day - Celanese

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Celanese Corporation (CE) is a global technology leader in the production of specialty materials and chemical products which are used in most major industries and consumer applications. 

The company has been in the headlines recently for a couple of reasons.

After shrinking its position in the first and second quarters earlier this year, Warren Buffet's Berkshire Hathaway sold out of its stake in Celanese during the third quarter. The position was established in the first quarter of 2022. 

More recently, the company's stock price is up over 20% since their last earnings statement...

In looking at the monthly chart and based on published reports about Berkshire's investment timings, undoubtedly the Oracle of Omaha made money on this investment.  

Investors and traders can never know in advance what price is going to do but in this case it seems that Berkshire may be having seller's remorse after this one.

From a price action technical analysis perspective we can see down on the weekly chart that price did indeed drop around 10% after Berkshire exited.  In fact, price crossed down below a change control zone before catapulting back to the upside.

Change control zones are one of the five price action tools we teach when charting anything.  By definition, they are an area that represents where neither the bulls nor bears are in charge.  Price can slash though the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it.  Or, price can trade aimlessly sideways within it.  When price breaks away from the zone it can often get drawn back to it like a magnet. And in this case we see all of the above are true.

Trading around $152 earlier today, we can see that price has been and is rapidly approaching potential overhead resistance in the $157 area.  However, if price decides to pull back prior to reaching that level we've identified potential pull back levels of interest using traditional and advanced Fibonacci techniques.

Should price decide to break through this potential resistance area then it may want to target previous $162 or $171 support and resistance levels. Or perhaps even higher at $176.50 all time highs (ATH).

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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