Chemical giant Albemarle (ALB) has shown renewed strength in August, with a recent push above the 200-day moving average signaling a strong case for further upside. Today we'll review why this recent breakout means a likely new bullish phase for this large cap lithium name and identify some key factors that would help us validate the bullish case. The daily chart of ALB shows an initial push above the 200-day moving average in July, although that breakout failed to sustain its gains above this long-term trend barometer. After a bounce off the 50-day moving average, Albemarle once again popped above the 200-day before stalling out at the July swing high. Over the next three weeks, ALB has pulled back to moving average support and then returned back to the recent swing high. While there was a bearish momentum divergence in mid-August, with higher price highs and lower peaks in the RSI, this week's rally has come with even stronger momentum. With improving momentum and clear support at the 200-day moving average, ALB appears to be setting up with a decent risk-reward ratio assuming further upside potential. How meaningful was this recent breakout above the 200-day moving average? Looking at the past three years, we can see a number of failed attempts to break above this trend-following mechanism. As the secular downtrend persisted through 2023, 2024 and now 2025, countertrend rallies to the 200-day met with clear resistance as the downward phase was confirmed. With ALB finally clearing its 200-day moving average, we see this chart as in a confirmed bullish phase as long as the momentum remains healthy and the stock holds the 200-day on any pullbacks. The recent breakout also created a "double top breakout" pattern on the point & figure chart. This classic form of chart analysis tracks uptrends and downtrends using columns of X's and O's. When a column of X's breaks higher than the previous column of X's, we consider this a bullish breakout as it presents a new upward thrust in price action. With ALB now breaking to a new high on the point & figure chart, the uptrend should be considered "innocent until proven guilty." What indicators could help us validate the bullish breakout? The Chaikin Money Flow has now switched back above the zero level, indicating a new accumulation period for Albemarle. The accumulation-distribution line is also trending higher, suggesting that institutional volume is following this breakout name to even further peaks. -David Keller, CMT marketmisbehavior.com DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
