Why LyondellBasell Stock Bounced Back after Disappointing 3Q16



LyondellBasell set to announce 4Q16 earnings

LyondellBasell Industries (LYB) is set to announce its 4Q16 earnings on February 3, 2017, during market hours. In this series, we’ll look at LYB’s stock performance since its 3Q16 earnings release on November 1, 2016, analysts’ revenue forecasts, EPS (earnings per share) estimates, recommendations, and valuations to help you make informed decisions.

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LyondellBasell’s stock performance

From November 1, 2016, through January 23, 2017, LYB has risen 14.6%. It has also outperformed its peers Dow Chemical (DOW) and Eastman Chemical (EMN), with returns of 6.2% and 6.8%, respectively.

LYB also outperformed the broad-based SPDR S&P 500 ETF (SPY), which rose 6.4% during that period. But LYB underperformed Celanese (CE), which returned 15.0% for the same period.

LyondellBasell’s stock rebound was influenced by the company’s positive developments in that period. It announced the completion of the expansion of its Corpus Christi facility in Texas. Now it can produce 2.5 billion pounds of ethylene per year compared to 1.7 billion pounds earlier.

Investors are remaining positive that the company’s unusually high maintenance is expected to be completed by 4Q16. That would help LYB’s operating efficiency and contribute to its top and bottom lines.

Moving average and relative strength index

LyondellBasell’s gains after its 3Q16 earnings pushed the stock to trade above its 100-day moving average. As of January 23, 2017, LYB was trading 9.3% above its 100-day moving average of $83.45, indicating an upward trend in the stock. Its 52-week low is $69.82, and its 52-week high is $95.89.

The 14-day RSI (relative strength index) of 76 indicates that the stock has moved temporarily to an overbought situation. An RSI of 70 means that a stock has moved into an overbought situation, whereas an RSI below 30 indicates that a stock has moved into an oversold position.

Next, we’ll take a look at analysts’ revenue expectations for LYB in 4Q16.


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