3 Chemical Stocks for Short-Term Traders

As I wrote earlier today, one of the areas where there has been a significant amount of selling is in basic materials. Here, mining companies, steel companies and other materials-related firms have begun to correct after climbing to significant intermediate and longer-term highs. But within the basic materials group, one area where the selling has been especially persistent and widespread is in industrial chemicals.

And having noted pullbacks in DuPont (NYSE: DD) and Dow Chemical (NYSE: DOW) elsewhere (see link above), here are some additional sell-offs in bull market territory among some of the lesser known chemical stocks in the market.

Shares of Ashland Inc. (NYSE: ASH) have closed lower for three out of four trading days heading into trading on Wednesday. The stock has been pulling back in the wake of rallying to its highest level since the summer of 2011, but has not yet reached technically oversold territory above the 200-day moving average. In fact, the last time ASH made a significant pullback was back in mid-December, during a three-day retreat that took shares of Ashland briefly into bear market territory.

ASH has consider buying ratings of 8 out of 10, and a short-term, positive edge of half a percent.

Also closing lower for three out of the last four sessions are shares of Cabot Corporation (NYSE: CBT). Like Ashland, shares of Cabot are in retreat after climbing to levels not reached since July. But after pulling back by two and a half percent on Tuesday, CBT has a short-term, positive edge of more than three-quarters of a percent.

While shares of Ashland have been trading in bull market territory since mid-December, Cabot Corporation is a much more recent arrival above the 200-day moving average, having climbed above that level near the end of January.

But the highest rated stock in today’s report is Olin Corporation (NYSE: OLN). Trading in bull market territory since mid-January, shares of Olin Corporation have since closed lower for four out of the past five trading days, and are back in technically oversold territory.

Olin Corporation has a positive edge in the short-term of more than half a percent, and a top, “consider buying”, rating of 10 out of 10.

Coming Spring 2012: the second edition of How Markets Really Work: A Quantitative Guide to Stock Market Behavior by Larry Connors and Cesar Alvarez. Click here to learn more.

David Penn is Editor in Chief of TradingMarkets.com