DuPont de Nemours Inc. (NYSE: DD) shares have lost more than 10.5% in value since the beginning of this year, updating the 52-week low following yesterday’s trading session. The Dupont plans to sell the electronics and image processing division, whose sales fell during three quarters of last year.
In the previous week, DuPont stock decreased by 6.77%. S&P 500 dropped by 2.58% within the same period. The DD stock prices are down 14.8% over the past three months, compared with a 1.3% decline recorded by the industry.
Dupont is scheduled to report fourth-quarter 2019 results right before the opening bell on January 30th. Market strategists are expecting week results. Currently, there is a strong bear trend and sentiment toward DD. However, there may be a “silver lining” if its business strategy to modify pricing and control some costs is successful. This could cause a significant jump in the stock price right after earning release.
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DD Support and Resistance
The Dupont stock prices continues to demonstrate negative technicals. The #DD quotes updated critical lows again. Currently, #DD quotes are testing the local support level of 57.50. The 62.00 level is the key resistance. The instrument has the potential to reduce further. Indicators show the strength of the sellers: the price has consolidated below MA (50) and MA (200); the MACD histogram is in the negative zone and continues to decline. Positions are to be opened from key levels. Comparing Dupont’s stock numbers with its competitors in the industry, we can say that #DD shares are a SELL.
Resistance levels: 59.50, 62.00, 63.50.
Support levels: 57.50.
Investors continue to monitor the situation with coronavirus in China. Due to the increase in the number of diseased, the authorities urged US citizens to cancel trips to China, and President Donald Trump offered to provide the PRC with any necessary assistance. Several US companies, including Walt Disney, Starbucks, and McDonald’s, have suspended operations in hazardous areas.
Generally, the situation remains challenging, and investors’ concerns about increasing economic losses are growing. The market also begins to prepare for the upcoming Fed meeting on Thursday. The regulator is expected to leave monetary policy unchanged but will try to calm the market in connection with the Chinese epidemic.
During the day, market participants are also waiting for the publication of January data on the CB consumer confidence index. The indicator is expected to grow from 126.5 to 128.0 points, which may support the dollar.
In the absence of major economic releases, investors are focused on the epidemic in China and the situation with Brexit. The market is alarmed by the possible negative consequences of the spread of the deadly coronavirus in the PRC. At the same time, the situation continues to deteriorate: on Monday, the first case of infection in Europe was officially confirmed in Germany.
Of the closer problems, trade negotiations between the EU and Great Britain, which should begin soon, come first. The deal must be concluded within 11 months, before the end of the transition period, and many experts question the possibility of a positive outcome. Yesterday, the Prime Minister of Ireland Leo Varadkar noted that the conclusion of the deal would be difficult, and the leading European negotiator Michel Barnier stated that after Brexit, there would be no opportunity for free trade between the EU and Great Britain. In the new circumstances, such a trade will be beneficial to London, but not to the EU, since the UK will have more opportunities to subsidize its own business.
The pound is pressured by recent statements of European politicians, indicating that negotiations on a trade deal will be difficult, and the UK will not be able to keep the benefits of the EU free trade agreement. Also, investors fear that the Bank of England might cut the key rate to 0.50% this week, as the retiring regulator’s head Mark Carney previously hinted. The main reasons for this decision may be a weak recovery of the British economy and a severe decrease in inflation.
DD Trading tips
If Dupont’s price consolidates below the support level of 57.50, #DD stock quotes may decline further. Potential profits should be locked in by orders at 55.00, 53.00 and 50.00. Stop loss will be placed at 60.00. If the price consolidates above 62.00, one may consider buying #DD. The movement potential is aimed in the area of 66.50–68.50. Stop loss should be placed at 59.50. Implementation time: 3 days.
DD Stock Recommendations
Jan-14-20 Initiated Gordon Haskett Buy $71
Jan-06-20 Initiated JP Morgan Neutral $62
Dec-17-19 Reiterated Cowen Outperform $83 → $80
Nov-15-19 Reiterated Cowen Outperform $77 → $83
Sep-10-19 Initiated Jefferies Buy $85
Aug-30-19 Upgrade Exane BNP Paribas Neutral → Outperform
Aug-20-19 Reiterated Cowen Outperform $83 → $77
Jun-25-19 Resumed Monness Crespi & Hardt Neutral
Jun-10-19 Initiated Cowen Outperform $83
DD 1 Day Moving Averages
Name Value Action
Exponential Moving Average (5) 58.95 Sell
Simple Moving Average (5) 59.22 Sell
Exponential Moving Average (10) 59.82 Sell
Simple Moving Average (10) 60.24 Sell
Exponential Moving Average (20) 60.87 Sell
Simple Moving Average (20) 60.98 Sell
Exponential Moving Average (30) 61.69 Sell
Simple Moving Average (30) 62.00 Sell
Exponential Moving Average (50) 62.98 Sell
Simple Moving Average (50) 63.24 Sell
Exponential Moving Average (100) 65.25 Sell
Simple Moving Average (100) 66.04 Sell
Exponential Moving Average (200) 68.95 Sell
Simple Moving Average (200) 68.81 Sell
Ichimoku Cloud Base Line (9, 26, 52, 26) 61.27 Neutral
Volume Weighted Moving Average (20) 61.05 Sell
Hull Moving Average (9) 57.81 Buy