Commercial Metals (CMC) hitting upper rail of downward sloped channel
Steel manufacturing company Commercial Metals (NYSE: CMC) has been trending lower for almost a year since hitting a ten-year high last February. The stock peaked at $26.06 last year and fell as low as $15.11 in December. Like most stocks, Commercial Metals has rallied in the past month. But it is now facing possible resistance at the upper rail of a downward sloped trend channel.
The upper rail is connected by the closing highs from November and December while the lower rail connects the lows from June, October and December. It is also worth noting that the upper rail is just above the 50-day moving average. The stock has struggled to break out after moving above the trend line several times in recent months.
The daily stochastic readings are in overbought territory like they were in November, just before the stock turned lower.
The company’s fundamentals are mixed with earnings growing by 23% per year over the last three years. Sales have declined by 2% per year over the same time period. The management efficiency and profitability measurements are somewhat low as well with an ROE of 12.2% and a profit margin of 4.7%.
The Tickeron AI Prediction tool did generate a bearish signal on January 30. The signal had a confidence level of 74% for a decline of 4% over the next month. The past signals generated on Commercial Metals have been accurate 79% of the time.
CMC's Stochastic Oscillator remains in oversold zone for 10 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator entered the oversold zone -- be on the watch for CMC's price rising or consolidating in the future. That's also the time to consider buying the stock or exploring call options.
CMC may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on April 11, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on CMC as a result. In of 79 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for CMC turned negative on April 08, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 43 similar instances when the indicator turned negative. In of the 43 cases the stock turned lower in the days that followed. This puts the odds of success at .
CMC moved below its 50-day moving average on April 22, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for CMC crossed bearishly below the 50-day moving average on April 25, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CMC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for CMC entered a downward trend on April 26, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 69, placing this stock better than average.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.465) is normal, around the industry mean (1.243). P/E Ratio (9.285) is within average values for comparable stocks, (12.708). CMC's Projected Growth (PEG Ratio) (0.000) is very low in comparison to the industry average of (0.757). CMC has a moderately low Dividend Yield (0.012) as compared to the industry average of (0.046). P/S Ratio (0.752) is also within normal values, averaging (1.222).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. CMC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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General Information
a manufacturer of steel reinforcing products
Industry Steel