Today we are going to look at Air Products and Chemicals (APD) to see why it has been a great stock to own since 2010. In glancing at their chart it has been in a very strong uptrend. We will also look at the fundamentals as well to see if the trend is set to continue. We will look at the 7 fundamental parameters I look to see if a stock can be considered a growth stock. Then we will take a look at the technical analysis side using the setups I have created and use for my trades. I have no plans to own Air Products and Chemicals in the next 72 hours and do not hold any positions in APD.
Air Products and Chemicals Inc (APD): A Great Stock to Own since 2010
There are 7 fundamental markers I look for in a stock. I try to only purchase growth stocks so these are the parameters I look for to see if a stock meets the majority of the markers. I prefer to have all seven fulfilled. You can it more in depth here: https://evancarthey.com/how-to-scan-for-winning-stocks-an-insiders-view-to-my-process/
- Market Cap: > $300 million
- EPS growth past 5 years: >0%
- P/E: Over 10
- EPS growth next 5 years: >0%
- Sales growth past 5 years: Over 20%
- Debt/Equity: <0.1
- Sales growth qtr over qtr: Over 5%
Does the stock meet these 7 markers?
- Market Cap: 44.61B (YES)
- EPS growth past 5 years: 10.10% (YES)
- P/E: 26.87 YES
- EPS growth next 5 years: 12.03% (YES)
- Sales growth past 5 years: -2.60% (NO)
- Debt/Equity: 0.34 (YES)
- Sales growth qtr over qtr: 1.50% (NO)
I used Finviz.com for the fundamental analysis screener. With Air Products and Chemicals hitting only 5 of the 7 markers it is not a growth stock. Air Products and Chemicals has a great Debt/Equity ratio at 0.34. Their sales have not been good so it is interesting as to why the stock continues to move up. In fact, since Feb 2019 the stock has gone from around $160 to over $200.
Before I would trade just about any stock that fit my technical parameters. Unfortunately, I have had to learn the hard way that the fundamentals of a stock are just as important (if not more) than the technical setups.
Technical Analysis for Air Products and Chemicals
Air Products and Chemicals is currently in a short setup. The 1st exit is the top pink line at $189.36. The 2nd exit is the bottom pink line at$184.46. This assumes the pivot high around $203.52 stays in place. If price breaks up and makes a new high before hitting the retracement levels then the Fibonacci retracement would move up with it. The 1st exit is the 38% Fib level and the second is the 50%.
Until this stock pulls back I don’t have any other setups. Below is a monthly chart. Look at how strong the uptrend is with it.
I’m not big into trend lines but when a stock is running up like this it is one of the only tools I use to analyze it. The only thing to watch out for here is do you see how price is getting close to hitting the upper trend line? That doesn’t guarantee price is going to move down when it does. But when price has been moving explosively up then it could come into play.
If you see an exhaustion gap happen to the upside then I would start to be cautious if I was in the stock. Look for it on the Monthly, Weekly, and Daily charts.
Popular Links
Here are a couple of links if you are looking at how I view the market and some trade setups. You can create your own trading style and setups. Quit paying losing traders to teach you. The only thing they teach is how to lose money.
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