Chemical Stock Poised To Bounce Back Amid C-Suite Shakeup

The shares of LyondellBasell Industries (LYB) look ready to bounce back, amid news that Peter Vanacker will become the company’s CEO, effective May 23. The $101 area captured the stock’s most recent pullback from a rally to the $108 region, helping LYB maintain its 13.7% year-to-date lead. Plus, it now looks as though the security may soon attempt another run higher, given LYB is within striking distance of a historically bullish trendline that has preceded major rallies.

Specifically, LyondellBasell stock just pulled back to the 50-day moving average. According to a study from Schaeffer’s Senior Quantitative Analyst Rocky White, similar pullbacks occurred six times over the past three years. The equity saw a positive one-month return each time after these signals, averaging a 6.4% pop in that time period. From its current perch of $104.96, a similar move would put LYB back above the $110 mark for the first time since mid-June.

Refinitiv Eikon

Analysts lean pessimistic towards LyondellBasell Industries, leaving plenty of room for upgrades moving forward. Of the 12 analysts in coverage, seven gave LYB a “hold” or worse rating. Plus, the 12-month consensus target price of $111.81 is only a slim 6.5% premium to the stock’s current perch.

The options pits are far more bullish, with a penchant for calls. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), LYB’s 50-day call/put volume ratio of 2.82 sits higher than all but 6% of readings from the past year. This suggests calls have been picked up at a much quicker-than-usual pace in the last two months.

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