Kronos Worldwide Inc. needs to break above $20

Oct 24th, 2011 – 1 Comment

What I can tell you is that if KRO breaks above $20.00 it can run to $22.00 without a lot of resistance.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Hello Mr. Schizas,

Do you know anything about a stock called Kronos? Apparently they have the US highway line painting (titanium)business “tied up”, with a 5 yr. backlog of orders. If this is the case, along with Mr Obama’s plan to inject another billion dollars into highway/infra structure development, would you consider this a viable long term (3-5yrs)play?

Thank you for your time,

John

 

Hey John,

Thanks for the assignment. The most frequently asked question in the universe of investing is ” Do you know anything about..?”.  My most frequent answer is more often than not a resounding ” not one single thing”. However in the modern era with a personal computer and a connection to the internet all can be revealed. 

 Kronos Worldwide Inc. (KRO NYSE) is a leader in the production of titanium dioxide pigment used in paints and plastics. The chemical  is desired because it provides optimum whiteness and opacity.  On September 30, 2011 the company announced a price increase of $0.25 per pound which can only help the bottom line.

Lets run the charts and see what we can learn about the prospects for KRO.

 

 

The three year chart indicates that the uptrend that the shares had been riding since the summer of 2009 has been broken. But what a ride from a low of $2.50 to the all time high of $34.50 in July of 2011. There is also a death cross that has formed which cannot be ignored. 

 

 

 

The six month chart illustrates the bounce off of the October 04, 2011 low of $14.16. producing a 34% gain in three weeks. Yowzer! The question that we need answered is does KRO have anything left in the tank?

The MACD and RSI are signalling continued momnetum to the upside. The October move has formed a pennant which is a continuation pattern. The pennant suggests that there is still some upside left in the advance.

There is resistance at $20.00 that has to be taken out if this run is going to contunue. The next corporate event for KRO is the release of  Q3 results which  is scheduled for November 3, 2011. Volume which was strong at the beginning of October has thinned out. The lower number of shares trading has not been an aggressive drop but a pullback none the less. 

I can’t give you a forecast for a 3-5 year period. I just do not feel its a realistic time frame. What I can tell you is that if KRO breaks above $20.00 it can run to $22.00 without a lot of resistance. Watch for a breakout and the calendar for the release of Q3.

 

Make it a profitable day and happy capitalism!

 

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