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Trade of the Day: Commercial Metals Company (CMC) Is on the Road to more Gains

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Commercial Metals Company (NYSE: CMC ) - This steel company manufactures, recycles and markets steel and metal product in the U.S. and internationally. It is a significant large producer of rebar and merchant bar, and the largest manufacturer of steel fence posts in the U.S.

On Jan. 10, Standard & Poor's Capital IQ raised their opinion on CMC to a four-star "buy" from a "hold" and increased their 12-month price target by $9 to $25. CMC is on an August 31 fiscal year.

S&P raised their fiscal year 2017 and FY 2018 EPS by 15 cents and 10 cents to $1 and $1.35, due to higher projected demand for nonresidential and highway construction along with lower volume of competitive imported steel. Highway projects, driven by the new multiyear highway funding bill (FAST Act) are expected to create demand for CMC' s products.

The company's strong financial position makes CMC an undervalued choice in the steel industry.

Currently, CMC is consolidating in a small saucer with support at $20 that was preceded by a CBR Buy signal. The saucer's low forms a double bottom with a break-away-gap in November that carried the stock to a new all-time high at $24.64.

Very high volume at double the normal accompanied yesterday's advance, with the stock closing slightly above its 20-day moving average. The next objective: to pierce the 50-day moving average, which would place it in an ideal position to attack the open gap at $22.42 to $22.09 and the all-time high.

Thus, buy CMC at $21.50 with a price objective of $25 within 90 days for a trading objective of over 16%.

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The post Trade of the Day: Commercial Metals Company (CMC) Is on the Road to more Gains appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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