Eastman Chemical and Isophthalic acid
On April 13, 2017, Eastman Chemical (EMN) announced an increase in the price of Isophthalic acid in North America and Latin America. The increase of $0.33 per kilogram will be effective May 1, 2017, or as the contract allows.
The price hikes were mainly driven by an increase in raw material costs. The price hike could impact EMN’s revenue positively in 2Q17 provided volumes don’t fall. However, since the price rise was a result of higher raw material prices, we could see an increase in the cost of goods sold as well.
EMN’s stock price movement for week ended April 14
For the week ended April 14, 2017, EMN closed at $77.93, representing a 3.0% fall for the week. EMN stock traded marginally above the 100-day moving average of $77.92. If the stock continues its downward trend, we could see a 100-day moving average trend reversal.
However, on a year-to-date basis, EMN has risen 3.6%. Its 14-day RSI (relative strength index) of 41 indicates that the stock is neither overbought nor oversold. An RSI of 70 indicates that a stock is overbought, and a score of 30 suggests that a stock is oversold. EMN’s 52-week low is $62.70, and its 52-week high is $82.10.
EMN outperformed the ProShares Ultra Basic Materials (UYM), which fell 5.4% for the week ended April 14, 2017. UYM invests 1.4% of its portfolio in Eastman Chemical. The top holdings of the fund include Dow Chemical (DOW), DuPont (DD), and Monsanto (MON), which have weights of 8.2%, 8.0%, and 6.1%, respectively, as of April 14, 2017.
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