Volume is running at near triple the daily average and is easily the heaviest positive day of the year. This breaks a month-long trend of very light trade that began right after the heavy selloff in early June. Once the extreme selling pressure eased on June 17, Cabot was able to gain some footing near $12.00. Since then, the stock has had a strong recovery, rebounding over 30% going into this week.

CBT (NYSE)- Daily: Cabot Corp. Source: TradeStation

Today's breakout on heavy trade has left behind a quite a bit of underlying support. The multi-week highs, left behind in May near $18.00, may be a hard level to hold considering Cabot is already up 50% in a month. I expect the area of the June highs and previous July highs, between $17.00 and $16.50, to be a low-risk spot to buy if the stock gives back some of its current run.

On the upside, the $22.00 will likely bring out some heavy selling. This is the area of last summer's lows as well as October. Once through $22.00 in November, Cabot really came apart.

At the time of publication, Morrow had no positions in the stocks mentioned.

Know what you own: Other specialty chemical stocks include Sigma-Aldrich Corporation (SIAL - commentary - Trade Now), Braskem (BAK - commentary - Trade Now), Lubrizol (LZ - commentary - Trade Now), Westlake Chemical (WLK - commentary - Trade Now), W.R. Grace (GRA - commentary - Trade Now) and NewMarket (NEU - commentary - Trade Now).