Albemarle (ALB) and Linde (LIN)

Question: your thoughts relative to ALB and LIN are very welcome. Thank you

In summary, Albemarle (ALB) has had a big rally but there is a case for more upside from a cycle low in April 2025 that resembles prior cycle lows from early 2020, late 2015, early 2009, and early 2000. Linde (LIN) was at risk to break down from a topping process, but the stock undercut/defended its 38.2% retracement of the late 2022-late 2024 rally and rising 200-week moving average on a weekly bullish engulfing pattern in early December to suggest a "choppy" vs. "toppy" chart pattern.

Albemarle (ALB)

ALB fits with the theme of lithium. Our Straight from the Chart blog highlighted a developing double bottom for the Global X Lithium & Battery Tech ETF (LIT) on August 26. We also flagged a bullish pattern for Sociedad Quimico y Minera de Chile SA (SQM), a major lithium producer based in Chile, in our October 17 The Stock Pulse.

So how does ALB look? The stock's rally from April broke through resistances at 106.96 and 113.91 in late November to target the declining 200-week moving average at 153.82, the 38.2% retracement of the November 2022-April 2025 decline at 158.34, and the late 2023 big breakdown point at the prior lows from early 2023 and early 2022 near 169-172. If ALB can clear these levels, then there is additional upside potential to 191.99 (50% retracement) and 225.63 (61.8% retracement).

If these resistances hold, we would view an interim dip as a healthy reset for the bulls, especially one that holds above the prior resistance zone from 113.91 to 106.96, which would maintain a bullish structure for ALB - see Chart 1 below.

Chart 1: Albemarle (ALB): Weekly chart with moving averages

The monthly logarithmic chart for ALB (Chart 2 below) combines the absolute price (top panel) with the price for ALB relative to the S&P 500 (bottom panel) and shows important cycle lows for the stock in early 2025, late 2019/early 2020, late 2015, late 2008/early 2009, and early 2000. In most cases, the lows relative to the S&P 500 preceded the absolute price lows. In our view, these prior cycles make a case for more upside on ALB, but the stock must decisively break beyond the 145 level to avert the risk of a head and shoulders top.

Chart 2: Albemarle (ALB) (top) and relative to the S&P 500 (bottom): Monthly log scale

Linde (LIN)

LIN was at risk to break down from an early 2024 into late 2025 topping process, but the stock undercut/defended its 38.2% retracement of the late 2022-late 2024 rally and rising 200-week moving average on a weekly bullish engulfing pattern in early December to suggest a "choppy" vs. "toppy" chart pattern.

This choppy pattern suggests a trading range for LIN. Ideally, the stock holds 413.61-408.65 (range lows prior to the push lower in early December) to keep the false breakdown (aka bear trap) intact. A tactical rebound within this trading range could run to the declining 26- and 40-week moving averages near 449-452 and potentially toward the upper end of the range from 477 to 487.

We respect bullish tests of a rising 200-week moving average as a support within an longer-term uptrend. If LIN cannot muster the strength for a meaningful rally from the early December bullish engulfing pattern off its rising 200-week moving average near 397, then the low 400s to upper 300s (bullish engulfing pattern low at 387.78) become exposed ahead of 50% and 61.8% retracements near 375 and 348, respectively.

LIN has a bearish trend relative to the S&P 500 but is up ticking from an early December low. This low vs. the S&P 500 coincide with the bullish engulfing pattern on the absolute price chart, and a continued relative uptick would support the case for an absolute price rally within LIN's trading range highlighted above.

Chart 3: Linde (LIN) (top) and relative to the S&P 500 (bottom): Weekly chart