Can Ashland’s Stock Performance Continue to Impress?
Ashland’s stock performance
Ashland (ASH) stock has made impressive gains in 2017 so far. On a year-to-date basis, Ashland has returned 21.1% and has outperformed the broad-based SPDR S&P 500 ETF (SPY), which has returned 12.0%. ASH’s peers Celanese (CE), Eastman Chemical (EMN), and Westlake Chemical (WLK) have returned 32.5%, 19.6%, and 49.2% for the same period, respectively.
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Positive business developments have driven Ashland’s strong performance. ASH completed the acquisition of Pharmachem this year. ASH also acquired composites resin manufacturing facility in Etain, France, and its associated business from Reichhold Holdings International. Ashland also received a US patent for its Purekote 23589 dispersion and Purekote 21412A coating system. Further, Ashland has been increasing the prices of several of its products, which is expected to improve ASH’s revenue going forward provided the volumes don’t drop. All these positive factors have driven the stock price up.
Moving average and RSI
The strong performance of ASH has resulted in the stock trading 1.8% above the 100-day moving average price of $64.42, indicating an upward trend in the stock. However, ASH has a 14-day relative strength index of 71, indicating that the stock has moved into an overbought situation temporarily and investors should be cautious as there could be selling pressure on the stock. An RSI of 70 and above indicates that the stock is overbought, while an RSI of 30 and below indicates that the stock is oversold.