Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Celanese ( CE) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Celanese as such a stock due to the following factors:

  • CE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.5 million.
  • CE has traded 1.4 million shares today.
  • CE is trading at 2.13 times the normal volume for the stock at this time of day.
  • CE crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on CE:

Celanese Corporation, a technology and specialty materials company, manufactures and sells value-added chemicals, thermoplastic polymers, and other chemical-based products worldwide. The stock currently has a dividend yield of 1.8%. CE has a PE ratio of 14.2. Currently there are 5 analysts that rate Celanese a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Celanese has been 966,100 shares per day over the past 30 days. Celanese has a market cap of $8.9 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.37 and a short float of 3.7% with 4.91 days to cover. Shares are down 3.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Celanese as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.97, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has slightly increased to $166.00 million or 7.79% when compared to the same quarter last year. In addition, CELANESE CORP has also modestly surpassed the industry average cash flow growth rate of 1.48%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • CELANESE CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CELANESE CORP reported lower earnings of $4.03 versus $6.94 in the prior year. This year, the market expects an improvement in earnings ($5.23 versus $4.03).

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