Vulcan Materials Declined To Its 200-Day Simple Moving Average On Weak Earnings

Vulcan Materials Co

VMC
had a volatile ride after missing earnings estimates before the opening bell on August 4. The stock opened that day below its annual pivot at $173.07. This did not last long as analysts raised their outlook for Vulcan. On August 12 the stock set its 52-week intraday high at $193.96.

On September 16 shares of Vulcan were back below its annual pivot but stabilized just below its 200-day simple moving average at $170.35. On September 20 the stock traded as low as $166.31. Today Vulcan is back above the annual pivot at $173.07.

Vulcan Materials makes construction materials that are mainly used below the surfaces of runways, highways, parking lots and railroads. The materials include crushed stone, sand and gravel.

The stock is not cheap. Its p/e ratio is 34.65% with a dividend yield at just 0.87%. The company missed earnings-per-share estimates on Aug. 4. They missed on two of the past four quarters.

The Daily Chart for Vulcan Materials

Vulcan Materials has been above a golden cross since September 3, 2020, which is not shown on this chart. The 50-day simple moving average (in blue) is above the 200-day simple moving average (in green). Note the potential double top. The stock traded as high as $194.17 on May 10 and as high as $193.96 on August 12. Its monthly risky level is above the chart at $201.10.

Note that the annual pivot at $173.07 has been a magnet since February 24. The stock moved above this level this morning. The price target is the 50-day SMA at $180.42.

If the 200-day SMA fails to hold at $170.63 the downside risk is to the lower two horizontal lines. They are the quarterly and semiannual value levels at $156.00 and $151.06.

The Weekly Chart for Vulcan Materials

The weekly chart for Vulcan Materials is negative with the stock below its five-week modified moving average at $177.85. The stock is well above its 200-week simple moving average or reversion to the mean at $133.86. The 12x3x3 weekly slow Stochastic reading is declining at 44.70.

Trading Strategy: Buy shares of Vulcan Materials on weakness to its quarterly and semiannual value levels at $156.00 and $151.06. Reduce holdings on strength to its 50-day simple moving average at $180.42.