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Texas Industries Jumps Higher After Ending Standstill Pact

TXI's call volume and price action rise in tandem

by 12/1/2011 3:30:45 PM
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Texas Industries Inc. (TXI - 28.13) is bucking the path taken by the broader Dow Jones Industrial Average (DJIA) in today's session, and is sitting on an impressive 13.6% gain. The jump comes on the heels of TXI's earlier announcement that it terminated a standstill agreement with privately-owned NNS Holding, which had blocked the latter company's attempt to acquire more than a 20% interest in TXI.

Prior to the termination, TXI had been underperforming on the charts. In fact, shares of the stock are down 44.7% on a year-to-date basis, and tagged an annual low of $21.89 as recently as Nov. 23. Furthermore, over the course of the past 60 trading sessions, TXI has lagged the broader S&P 500 Index (SPX) by over 42 percentage points, on a relative-strength basis. With today's push higher, the equity is on track to finish above its 20-day moving average, a feat not accomplished since Oct. 27.

TXI price chart With 20-Day Moving Average

In light of TXI's technical troubles, sentiment remains bearish toward the stock. Short interest currently accounts for a lofty 25.9% of the equity's available float. It would take almost five weeks to cover these shorted shares, at TXI's average daily trading volume.

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