Incitec Pivot is a manufacturer and distributor of industrial explosives, industrial chemicals, and fertilisers to the agriculture and mining industries.
“There is significant upside risk to earnings due to the continued strength of both di-ammonium phosphate and ammonia prices (as the fertiliser market tightens),” Michael said. “This is especially as earnings are well leveraged to ongoing strength in global agriculture and fertiliser pricing – given that input costs are largely fixed.
“The share price has been in a long-term uptrend.
“Most recently it broke above some major resistance near $3.50 and then hit some long-term resistance at $4.
“For IPL to make an attempt at breaking through $4 and continuing its uptrend, this current pullback from the last few days needs to be fairly shallow.
“Ideally, we would like to see IPL ease back towards $3.50 and hold that level.
“That would then provide the next opportunity to buy IPL.
“Any sharp falls under $3.50 without a bounce-back would be a negative sign,” Michael said.
Incitec Pivot (IPL)
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