Technical Analysis on Huntsman and Dow Chemical: Dry Gas Prices Driving the Chemical Industry
LONDON, February 12, 2013 /PRNewswire/ --
The U.S. economy saw a sluggish advancement in the latter half of 2012. The estimated growth in GDP in the fourth quarter is 2%, down from 3% seen inthe 3rd quarter of 2012. Nonetheless,the U.S. economy has many other areas of potential incremental growth. The developing markets requirement for materials, energy and technology will go up exponentially going forward. Technological developments in the oil & gas industry may assist American companies that use energy as fuel to attain competitive advantage against companies in countries with high operational costs. StockCall has posted free technical research on Huntsman Corporation and The Dow Chemical Company which can be downloaded upon sign up at http://www.stockcall.com/signup
China is expected to overtake the United States as a world's largest economy by 2030. Nevertheless, it is worth noting that the revolution in energy production in the U.S. could still remain a force in the world economy for the next few years. Natural gas prices have bounced back to some extent from the lows of below $2 per million BTUs. Currently dry gas prices are trading at $3.60 per million BTU levels. This price range provides a massive competitive advantage for chemical companies, fertilizer manufacturers and manufacturing in general which use natural gas as a fuel. This has led to chemical companies moving production back to the U.S from overseas which in turn has seen plants on the Gulf Coast increase and build more capacity. It is understood that as long as natural gas liquids are flowing out of wells, this will eventually lead to a strategic competitive advantage.
Chemical companies, fertilizer manufacturers, small- to mid-cap E&P companies are building higher reserves and increasing production levels each year. Chemical companies such as Huntsman Corporation (NYSE: HUN) have exhibited robust profit margins due to cheaper natural gas prices relative to other larger more established chemical companies. Sign up and read the complimentary report on Huntsman Corporation (NYSE: HUN) at http://www.StockCall.com/HUN021213.pdf
Performance Plastics & Materials contribute 56% to The Dow Chemical Company's (NYSE: DOW) stock, Electronic and Functional Materials have significantly lower contribution of 18% towards the company's stock and Agricultural Science Products only contribute 15% the overall revenues. Its current stock price is trading at $33.09, with support levels at $27.05. The company reported collective revenue of $54 billion, with a very robust forecast for the next few years. The stock price has an 11% upside as the current stock price is trading close to its 52-week high. The free report on The Dow Chemical Company can be downloaded by signing up now at http://www.StockCall.com/DOW021213.pdf
Huntsman Corporation current stock price is trading at $18.92. The stock is presently trading close to its 52-week high of $19.07. The first resistance on the downside will be $16 level. At this time, the stock price is trading at 99% of its 52-week high. The stock is currently in a bullish mode as the industry outlook is positive with opportunities arising from falling gas prices leading to a reduced operational cost and higher gross margins. Hence, going forward we keep a positive outlook on Huntsman Corporation.
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