Ducks are lining up nicely for this share

TL;DR

Tenneco, a US auto parts supplier, has been in a bear market due to the rising popularity of electric vehicles. However, the chart analysis suggests potential for a reversal and takeover bids, supported by a recent takeover offer in the auto parts sector.

Transcript

hello it's John Burford with chart of the week for Monday the 15th of July and this week I'm covering a little-known share in the UK it's Tenneco which is one of the larger auto parts suppliers and manufacturers in the US and as you can see it's been in a bear market now off its $70 high back in early 2017 and of course the background to this bear ... Read More

Key Insights

• 🥳 The rise of electric vehicles has negatively impacted auto parts suppliers like Tenneco, leading to a bear market for the company.
• 🫥 Chart analysis indicates potential for a reversal in Tenneco's stock, supported by well-defined tram lines, wave patterns, and an overshoot area.
• 🥳 Tower International's recent takeover offer highlights potential consolidation and higher offers in the auto parts sector, suggesting a favorable environment for Tenneco.
• 🧑‍🏭 The wide gap in Tenneco's stock price acts as a magnet, attracting the market to move back up into the $15-$20 region.
• 🧑‍🏭 The combination of multiple factors, including a potential takeover bid and momentum divergence, indicates a positive outlook for a reversal in Tenneco's stock.
• 🏃 Tenneco's stock may experience a rapid run up to the upper tramline resistance, potentially reaching $20-$22.
• 📞 The recent takeover offer received by Tower International suggests that similar offers may be made for Tenneco, indicating potential consolidation in the sector.

Questions & Answers

Q: Why has Tenneco been in a bear market?

Tenneco's bear market is primarily attributed to the rise of electric vehicles, which have fewer parts compared to traditional gasoline or diesel vehicles. This shift in sentiment towards the sector has negatively impacted Tenneco's stock.

Q: What are the key features supporting a potential reversal for Tenneco?

The chart analysis highlights several key features, including well-defined tram lines, a wave pattern suggesting the current wave 5 may have terminated, and a significant momentum divergence. These factors indicate the potential for a rapid run up to the upper tramline resistance.

Q: How does the recent takeover offer for Tower International relate to Tenneco?

The takeover offer for Tower International, a competitor of Tenneco, suggests potential consolidation in the auto parts sector. This could also mean that there might be higher offers or potential takeover bids for Tenneco as well.

Q: What is the significance of the wide gap in Tenneco's stock price?

The wide gap acts as a magnet, making it attractive for the market to move back up into the $15-$20 region from its current $9 price level. This highlights the potential for an upward movement in Tenneco's stock.

Summary & Key Takeaways

• Tenneco, a major US auto parts supplier, has experienced a bear market since early 2017 due to the growth of electric vehicles, which require fewer parts than conventional vehicles.

• Chart analysis indicates that Tenneco may be ripe for a reversal, with tram lines, wave patterns, and an overshoot area supporting a potential upward movement towards $20-$22.

• Tower International, a competitor of Tenneco, recently received a takeover offer, suggesting potential consolidation and higher offers in the auto parts sector.