Eagle Materials' 15-min chart sees RSI oversold, KDJ golden cross formed.

Eagle Materials' 15-minute chart has triggered an RSI oversold signal and a KDJ golden cross at 10:30 AM on July 16th. This indicates that the stock price has experienced a rapid decline and is currently below its fundamental support level. Furthermore, the momentum of the stock price is shifting towards an upward trajectory, suggesting potential for further price increases.

Eagle Materials Inc. (NYSE: EXP), a major player in the U.S. building materials sector, experienced a significant shift in its stock price dynamics on July 16th. At 10:30 AM, the stock triggered an RSI (Relative Strength Index) oversold signal and a KDJ (K Moving Average, D Moving Average, J Moving Average) golden cross, indicating a potential reversal in the stock's downward trajectory [1].

The RSI oversold signal suggests that the stock price has fallen to a level where it is undervalued compared to its historical price movement. The KDJ golden cross, which occurs when the K moving average crosses above the D moving average, signals a bullish trend and is often seen as a buy signal. This combination of technical indicators points to a potential upward movement in the stock price.

The stock's recent decline has brought it below its fundamental support level, but the technical signals suggest that this could be a temporary setback. Eagle Materials' strong financial fundamentals, including consistent operating margins and returns above 20%, provide a solid foundation for the company [1].

Moreover, the company's vertical integration and ownership of raw materials like limestone and gypsum give it a significant cost advantage. This low-cost structure is particularly beneficial in commodity-style industries where price is king. Eagle's strategic focus on being the low-cost producer in each market it serves further supports its long-term growth prospects.

In addition, the company's exposure to the U.S. infrastructure spending and residential construction sectors, which are expected to drive demand for its products, adds to its appeal. The tight supply of cement and gypsum, coupled with rising demand, is likely to support higher prices and margins for the company.

While there are environmental risks associated with cement manufacturing, Eagle Materials is actively working to reduce its carbon footprint. The company's operational flexibility and focus on low-cost production position it well to absorb future compliance costs or carbon-pricing mechanisms.

Given the technical signals and the company's strong fundamentals, Eagle Materials Inc. (EXP) presents an interesting opportunity for investors. The stock's current valuation, at just 11x EBIT, seems undervalued relative to its margin profile and structural tailwinds.

References:
[1] https://www.livewiremarkets.com/wires/a-rock-solid-global-small-cap-stock-that-s-flying-under-the-radar