Shares of Dupont were massive movers during the trading session. The stock surged by close to 2 percent on the back of above average volumes which were 0.8 times the average daily volumes. The price action on the back of above average volumes is a clear indication of the shift of momentum towards the buy side. The rally in the stock was on the back of reports that Dupont would be cutting 1,700 jobs in Delaware and thousands more globally as it prepares its merger with Dow Chemicals. The move is being seen as a huge positive by analysts on the street.
It is imperative to state that Dow Chemicals and Dupont had announced earlier this month that the two companies would join to create a giant chemical producer that would eventually by split into three independent companies. At the time of the announcement, Dupont had announced a $700 million cost savings and restructuring program but had not provided any details. Dupont CEO sent a letter to his employees informing them 1,700 employee positions would be eliminated in Delaware at the beginning of the year. It is important to point towards the fact that the company has close to 54,000 employees worldwide and it believes that the restructuring program would affect about 10 percent of the total workforce.
When looking at the daily charts for Dupont Corporation, the stock has been in a strong uptrend ever since the deal announcement and has outperformed the broader indices which is a bullish signal. The stock has been forming higher highs and higher lows indicative of the strong buying interest. The momentum indicators for the stock continue to trend higher and show no signs of a reversal which is a bullish sign. Traders believe the stock could head to levels of $70.50 in the near term.