Shares of Domtar Corp. (UFS) have been trading in a sideways trading range. It looks like today is the day the range will be broken.
UFS makes and sells a variety of fiber-based products in two segments: pulp and paper and personal care. The company should benefit from strong demand in softwood and fluff pulp and its personal care unit is poised to benefit from productivity gains and new customers.
Take a look at the 1-year chart of UFS below with added notations:
Chart of UFS provided by TradingView
After jumping more than 20 percent on earnings, UFS moved into a small, sideways trading range. While in the range, the stock has formed a resistance area at $30 (red), and a level of support at $28 (green).
On the open this morning, shares of UFS broke below the $28 support level. A possible trade could be to short UFS under $28 with the expectation of a breakdown.
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UFS shares were trading at $27.77 per share on Tuesday morning, down $0.86 (-3.00%). Year-to-date, UFS has declined -25.82%, versus a 5.16% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock.Find Out: Key Level of Support Was Just Broken in Domtar (UFS) appeared first on StockNews.com