Mixing Up Gains in Westlake Chemical

• Posted by Greg Harmon
• on November 10th, 2016

Westlake Chemical ($WLK) make polyethylene. They make a lot of it. What is polyethylene you ask. Plastic. Polyethylene is the primary plastic used in plastic bags and bottles. And Westlake produces about 80 million tonnes of the stuff every year. That is a lot of Disani bottles and Glad bags. Their stock has had a rough year in 2016.

Falling from a peak in late 2014, it found a bottom to start 2016. But it really has not done much since then. The chart shows the stock price moved sideways from January through the end of July, with a small failed push higher in April. From July it started back higher again and has made a higher high through a series of steps. Suddenly the April bounce gains importance.

The push to a new higher high in October confirmed a Double Bottom was in and a trend higher in place. The stock pulled back to a higher low from there and is now back approaching the October higher. As it does the Bollinger Bands® are opening to the upside to allow a move. The RSI is rising and in the bullish zone and the MACD is crossing up. I got long the stock as I was writing this.

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