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September Penny Stocks To Watch

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Strong biotech activity drove penny stocks in August, lifting many to 2017 highs, according to Investopedia. Other low-priced stocks underperformed, held back by political dysfunction and late summer illiquidity that sidelined investment activity.

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Half of August’s penny stock picks returned in September, all to higher spots on the list. RADA Electronic Industries, Ltd. led the pack, gaining more than 40% for a two-year high. 22nd Century Group Inc. jumped 23% during the period, while Trilogy Metals Inc. racked up and additional 17%.

Large scale catalysts could drive fresh speculation. The iShares Nasdaq Biotechnology ETF, for instance, began the last week of August in a strong position shortly after Gilead Sciences Inc. announced its acquisition of Kite Pharma, Inc. Such events impact low-price issues that are easier for small traders to purchase and hold versus large pharma manufacturers.

1. RADA Electronic Industries, Ltd. (RADA)

Source: Investopedia

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RADA Electronic Industries, Ltd. (RADA), a defense electronics system of advanced electronic systems for airborne and land applications, moved from the number two spot in August to number one in September.

The stock fell into a multi-decade decline after it joined Nasdaq in the 1990s. It ground out a series of lower highs and lows through January 2016’s all-time 54-cent low.

The stock spent 16 months moving sideways in a narrow basing pattern before turning higher in May 2017 and rallying back to 2016 resistance at $1.78.

The stock cleared major resistance at $2.25 in July 2017, entering an uptrend that’s now filling the July 2015 gap between $2.50 and $3.60. Buying pressure remains strong, raising odds it will test 2015 resistance near $4.00.

Following capital raising activity with institutional investors, the company converted loans to equity and increased its net cash position by $13.3 million while reducing ongoing annual interest payments by approximately $250,000.

On Aug. 21, RADA completed a $10 million capital raise under an existing shelf prospectus, issuing 4,604,500 shares. The investors included leading Israeli institutional investors, such as Yelin-Lapidot Investment House, More Investment House, Noked Capital, and The Phoenix Insurance Company.

From Aug. 17 until Sept. 5, DBSI, the company’s primary shareholder, exercised warrants and converted a loan to equity. It sold a portion of the shares gained to institutional investors such as Optimus Fund and others. On a net basis over the period, DBSI increased its shareholding in RADA by 1,168,782 shares to approximately 12.2 million shares, representing 35% of the company’s equity on a fully diluted basis.

2. 22nd Century Group, Inc. (XXII)

Source: Investopedia

22nd Century Group, Inc. (XXII), a biotechnology company that provides tobacco harm reduction and development of proprietary hemp/cannabis strains, rose from the number three spot in August to number two in September.

The stock broke out above multi-year resistance near $1.50 in 2013, rallying to a record high a few months later at $6.36. It then began a persistent decline through August 2015 before finding support at 56 cents, followed by a bounce to $1.75.

The stock traded within these boundaries for 22 months, bouncing at support three times and reversing at resistance in equal measure. The price returned to that level a fourth time, improving odds for a breakout that could double the price in the year’s second half.

22nd Century Group found support near 70 cents in the second half of the year, testing that level three times ahead of a March 2017 uptick that has now reached range resistance. A breakout over $2.00 should draw strong buying interest favoring a high percentage rally back to its three-year high.

The stock hit its highest high since 2014 on Aug. 7, 2017, and pulled back to the 20-day SMA, testing support around $2.00. This price level could offer a platform for continued upside that reaches longer-term resistance near $4.00.

The stock joined the Russell Microcap Index three months ago when FTSE Russell reconstituted its U.S. and global equity indexes.

Membership in the Russell Microcap Index signifies automatic inclusion in the value style indexes. FTSE Russell determines membership for its Russell indexes primarily by objective, market-capitalization rankings and style attributes.

22nd Century Group focuses on genetic engineering and plant breeding that allows the increase or decrease of nicotine levels in tobacco plants and cannabinoids levels in cannabis plants. Its primary goal for tobacco is to lessen the harm caused by smoking. The primary goal for cannabis is to develop proprietary hemp/cannabis strains for new medicines and agricultural crops.

3. Trilogy Metals, Inc. (TMQ)

Source: Investopedia

Trilogy Metals Inc., an exploration stage company which engages in the development and exploration of mineral properties, joined the list at number five in August and moved to the number three spot in September.

The Vancouver, Canada-based company went public on the U.S. exchanges in April 2012 at $3.20, beginning an immediate downtrend to an all-time low at 15 cents in January 2016. A recovery wave mounted the 200-day EMA at 60 cents that stalled three months later, yielding a narrow basing pattern into a July 2017 recovery that reached a two-year high at $1.22.

The rally hit a three-year high at $1.35 on Aug. 7, yielding a pullback that’s testing 50-day EMA support, with a bounce at or above 90 cents, setting the stage for a strong buying impulse.

The company reported a strong working capital position of $20.1 million in the second quarter, with cash on hand of $14.5 million.

For the three months ending May 31, 2017, the company reported a net loss of $2.4 million compared to a net loss of $1.6 million for the corresponding period in 2016. This variance was primarily due to the size of the field programs at the Upper Kobuk Mineral Projects in 2017 as well as the timing of the program. An increase of $840,000 of mineral property expenses occurred during the three months ended May 31, 2017 compared to the three months ended May 31, 2016. In 2017, the field program at Arctic and Bornite began with drilling by early June compared to 2016 where the field program kicked off in early July.

The company announced a financial partnership with South32 Limited for an option to form a 50/50 joint venture for a minimum investment of $150 million. South32 is required to fund a minimum of $10 million per year, for up to three years to keep the option in good standing. The first $10 million has been advanced to the company and will be spent on a 12,000-meter exploration drill program at the Bornite deposit, which is already under way.

4. Intrepid Potash, Inc. (IPI)

Source: Investopedia

Intrepid Potash, Inc., the only U.S. producer of muriate of potash, moved from the number nine spot in August to number four in September.

The company sold off to 2008 support at $13.80 in 2014. Two years later, the stock began a decline that reached an all-time low at 65 cents in March 2016. The stock rose above $1.50 in June before settling in a sideways pattern ahead of a December 2016 breakout that soon stalled at $3.04.

A stair step bounce reached a 21-month high at $3.93 on Aug. 3, giving way to rectangular consolidation with support near $3.15. The stock is now testing range resistance, with a breakout to more upside that could reach the 200-week EMA, now descending from $8.00.

Intrepid generated a second quarter net loss of $5.9 million, or $0.05 per share, delivering a first-half net loss of $19.6 million, or $0.19 per share. This marked an improvement over the net losses of $13.4 million, or $0.18 per share, and $31.8 million or $0.42 per share, in the second quarter and the first half of 2016, respectively.

Improvements in year-over-year net loss per share were driven in part by a gain in outstanding shares from the March 2017 secondary offering.

Consolidated gross margin advanced to $3.7 million and $0.8 million in the second quarter and the first half of 2017, respectively, against the prior year. Improvements were due to lower cost solar potash production and higher average net realized potash pricing that offset lower average net realized sales prices for the product, Trio.

Cash provided by operating activities rose year-over-year to $9.7 million and $11.5 million for the second quarter and the first half of 2017, respectively. Increased cash flow was due to strong spring demand, increased potash prices, and the elimination of costlier conventionally mined potash from the production profile.

5. Tantech Holdings, Ltd. (TANH)

Source: Investopedia

Tantech Holdings, Ltd., a manufacturer of bamboo-based charcoal products for industrial energy applications and household cooking, heating, purification, agricultural and cleaning uses, moved from the number 10 spot in August to the number five spot in September.

The company went public at $6.00 in March 2015 and began an uptrend that topped out at $33.97 five months later. In the next three months, the stock relinquished more than 90% of its value. Bears maintained control into the April 2017 all-time low at $1, followed by a recovery that reached a 10-month high in July.

Pricing has tested resistance at the September 2016 breakdown through the October 2015 low, with a buying surge setting the stage for upside into the $6 range.

The stock hit an all-time low at $1.00 in April 2017. Bullish action since that time has reached 2016 resistance, with a breakout raising odds for a rally into the 2016 high at $6.00.

6. Cancer Genetics, Inc. (CGIX)

Source: Cancer Genetics

Cancer Genetics, Inc. (CGIX), a provider of personalized medicine, offers diagnostic products and services that enable precision medicine in the field of oncology.

The stock topped out at $23.25 in 2013 and ground sideways into a 2014 breakdown that accelerated into the second half of 2016. The stock dropped to an all-time low at $1.10, then turned higher in 2017, lifting above the 200-day EMA and reaching a 17-month high at $5.30 in March.

Price action since March has carved a long series of lower highs, generating a trendline with resistance at $3.90. A rally above the 2017 high would set the stage for rapid gains that could eventually reach double digits.

The company reported second quarter revenue of $6.6 million, with record biopharma demand with $7.1 million in new contract bookings for its biopharma services.

Clinical services revenue was up 20% in the quarter to $3 million over the same quarter in 2016. The company reduced its second quarter loss from operations by 22% compared to 2016.

The company is now supporting more than 170 clinical trials serving nine of the top 10 biopharma companies in the world.

7. Moleculin Biotech, Inc. (MBRX)

Source: Investopedia

Moleculin Biotech, Inc. (MBRX) went public in June 2016 at $8.99 and began a downtrend that continued to post new lows into May 2017 before it bottomed out at 71 cents. A June test held support ahead of an uptrend that completed a high volume base breakout which saw the stock rally to an 8-month high at $3.75 by the month’s end.

A pullback in July found support at the 50-day EMA, causing a bounce to range resistance, followed by a decline that could attract strong buying and continued upside toward $6.00.

The company recorded a net loss of $3.3 million in the second quarter of 2017 for the change in fair value on revaluation of its warrant liability associated with warrants issued in conjunction with its stock offering in February 2017.

The company recorded a gain in the second quarter of 2017 of $1.2 million related to the expiration of warrants issued as part of the February 2017 stock offering.

The net loss for the three months ended June 30, 2017 was $2.3 million, including non-cash income of $1.2 million related to a gain recognized on the expiration of warrants, which was offset by a non-cash expense of approximately $3.3 million on the change in fair value of the company’s warrant liability. The net loss also included additional noncash charges for $0.1 million for stock-based compensation and other stock-based expenses.

As of June 30, 2017, the company had $9.3 million in cash and cash equivalents compared to $5.0 million at Dec. 31, 2016. Through June 30, 2017, $3.2 million in cash was received from the exercise of warrants issued in the February public offering. Cash used in operations was $3.4 million for the period ending June 30, 2017.

8. Vivint Solar, Inc. (VSLR)

Source: Investopedia

Vivint Solar, Inc. (VSLR), which provides homeowners with simple and affordable clean energy, opened for trading in October 2014 at $17.01, ahead of a severe downtrend that bottomed out near $7.50 in December 2014. Lower lows in the second quarter of 2016 gave way to a basing pattern, followed by a June 2017 breakout that’s now testing 50-day EMA support. A bounce at this level could gain traction, testing the 2017 high ahead of additional gains into the $7.75 to $8.00 resistance zone.

Operating leases and incentives revenue was $43.4 million for the second quarter, up 45% from $30 million in the second quarter of the prior year. Total revenue for the quarter was $73 million, up 109% from $34.9 million in the same quarter of the prior year.

Cost of operating leases and incentives was $33.8 million for the quarter, down from $38.5 million in the same period of 2016.

Total operating expenses, including the cost of revenue, were $87.3 million, compared to $71.4 million in the same quarter of 2016.

Loss from operations was $14.3 million compared to $36.5 million in the same period of 2016.

As of June 30, 2017, Vivant Solar had $15 million in undrawn capacity in the working capital facility, and $308 million in undrawn capacity in the aggregation facility. The company also had approximately 109 MWs of installation capacity remaining in its tax equity funds.

9. China Information Technology Inc. (CNIT)

Source: Investopedia

China Information Technology Inc. (CNIT), a provider of Internet-based ad distribution and ad display terminal sharing systems in China, topped out at $16 in 2009 and broke down two years later, beginning a decline that continued into the 2012 low at 71 cents. A three-year bounce ended in a triple top reversal near $7.00 that gave way to November 2015 and March 2017 tests at the deep low.

Support held after a final washout, resulting in a two-legged recovery that has reached a 52-week high. Buying volume indicates the current pullback to 98 cents will mark an opportunity ahead of a rally that could reach the 200-week EMA over $2.00.

The company recently entered into a contract for the sale of 3,000 CNIT cloud-based ad terminals to be installed in office buildings, residential communities, shopping malls and outdoor locations throughout Tianjin Municipality, the primary industrial, commercial and economic center of North China.

The company has projected 2018 revenue of $30 million to $33 million and adjusted net income of $9 million to $11 million, with sales of 120,000 cloud-based ad terminals in 100 cities covering 200 million people throughout China.

10. Zynga, Inc. (ZNGA)

Source: Investopedia

Zynga, Inc., a company whose mission is to connect the world with games, became public in December of 2011. The FarmVille creator reached an all-time high at $15.91 in March 2012, then dropped in a straight line to $2.09 in November, ahead of a bounce that stalled near $6.00 in 2014.

The stock found support at the 2012 low in the first quarter of 2016, then turned higher, rallying to a three-year high in June 2017. Price action since then made a symmetrical triangle on top of the 200-week EMA.

The company achieved record mobile revenue and bookings in the second quarter, with revenue up 30% year-over-year and bookings up 33% year-over-year.

Mobile now represents 86% and 87% of total revenue and total bookings, respectively. Mobile online game revenue was up 39% year-over-year, and mobile user pay bookings were up 45% year-over-year. The company’s mobile audience reached 19 million average daily active users, up 28% year-over-year and the strongest since Q4 2014.

GAAP operating expenses for the quarter were 67% of revenue – down from 73% of revenue for the same period in Q2 2016, while non-GAAP operating expenses were 58% of bookings – down from 68% of bookings a year ago.

The company delivered its first quarter of GAAP pre-tax profit since Q4 2012, due in part to progress in improving operating leverage and the lowest quarter of stock-based compensation expense in more than three years.

The company generated operating cash flow of $37.8 million, which was its best quarterly performance in five years.

Penny stocks require investors to make some guesses about the future. Very few such stocks have a sufficient track record to indicate they will prosper. At the same time, the stocks on this list are in significant industries and have the potential to be vital players in their respective industries.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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Stock Picks

Stock Picks: HLG, SKY, BXC

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

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This review targets stocks that are among the leaders in terms of growth over the year. We did not take biotechnology sector into account when analyzing those securities.

 

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Hailiang Education Group Inc. (HLG)

Hailing Education Group Inc belonging to the Service (Education & Training Services) is our number one here, with the share price rising by 913.25% lately.

Hailiang Education Group Inc. was founded in 1995 and is headquartered in Hangzhou, China. The company focuses on providing educational services and primary and secondary schools in China. HLG provides education in various languages, including English, Spanish, French, Korean, Japanese, etc. The company also runs competitions on maths and helps the students to get ready for entering UK and US universities and colleges.

HLG shares were trading below $10 for a long period of time, but then in mid 2017 some good earnings reports came, and thus the investors flowed and an ascending trend, which is still here to stay, started.

At first, the shares soared when the company published its Q2 2017 earnings report. It showed the profit had increased by 68.70% to 167.70M CNY, compared to just 99.40M in Q2 2016. Meanwhile, the number of graduates had increased from 16,760 to 18,125, YoY. The company management had planned to increase the profits by only 30%, and those who trusted them were not at all upset.

The next earnings report (for Q3 and Q4) came at 502.70 CNY combined, which of course pushed the share prices ahead. The company was able to achieve such impressive revenue numbers after rising the payment for education and increasing the number of students. It’s that simple: whenever the number of students increases, the revenues increase as well. The investors might have expected such results after the first positive quarterly reports came in, so they just paid some more attention to the company and got nice profits, as each $1,000 invested into HLG shares brought over $9,000 profit.

Technically, the price broker the 200-day SMA in June 2017, and ever since there has been an ascending trend, which is here to stay for now. Investment funds transactions increased by 247%, which shows the interest towards this company is really huge. Meanwhile, the short float is as low as 3.03%.

Hailiang Education Group Inc. (HLG)

 

Skyline Corporation (SKY)

Skyline Corporation falling into the Industrial Goods (Manufactured Housing) sector is our number two for today, with +490.63% investor profit over the last year.

Skyline Corporation was founded back in 1951 and is headquartered in Elkhard, Indiana. The company creates and sells homes and prefab homes through their dealer network in the US and Canada. Typically, such a home consists of 2 to 4 bedrooms, a kitchen, a living room, a dining room, and one or two bathrooms. Upon client request, the house may be furnished with domestic appliances, heaters and coolers (depends on the country and state). As of May 31, 2017, the company sold 3,679 ready-made homes, 313 prefab homes, and 447 country and rural houses.

Before the 2008 crisis, SKY shares had been trading at around $40, which is quite understandable, as at that time nearly everyone could get mortgages. The real estate market made historical achievements every single week, and Skyline Corporation had no problems with new orders. When the crisis broke out, however, the price went drastically down and hit the lows below $5. It was not until four years passed that the stock started attempting to recover. In 2016, a new life began for SKY shares, as the price finally went above $5 and then benefited from Donald Trump’s presidency, under which the US business got more protected. As such, Trump’s policy lead to the job market growth and, eventually, to the stock market revival. This, in its turn, helped the US citizens earn more and spend more, including spending on new homes. Thus, Skyline Corporation started getting more orders and more revenues, although it still remained in the red before 2018.

The management decided to take a chance to merge with Champion Enterprises Holdings, LLC, which became the major driver for the share price, as the shares skyrocketed by nearly 50%.

In April, the company reported its results over the previous 9 months, with the operational profit of $5,988,000, compared to the loss of $2,041,000 over the previous period. Meanwhile, the net profit came at $5,789,000, against the net loss of $2,298,000 the previous year. These data mean that the merger with Champion Enterprises Holdings, LLC was a good idea. News on this merger came out in January, followed by insider buys of $831,711 at $16.87 to $17.48. As of now, SKY is trading at $32.20.

Technically, when the price first broke out $5 after a year of unsuccessful attempts, it also broke out the 200-day SMA, starting a new ascending trend, which is still active.

As per the data for the last 3 months, the investment funds are still quite interested in SKY shares, with the transactions increasing by 12.51%. The short float meanwhile is just at 5.76%.

Skyline Corporation (SKY)

 

 

BlueLinx Holdings Inc (BXC)

BlueLinx Holdings Inc. is on the third place. This company belongs to the Services (Building Materials Wholesale) sector, and its share prices went up by the impressive 362.19% over the year.

BlueLinx Holdings Inc was founded in 1954, formerly known as Georgia-Pacific Corporation. In May 2004 it merged with Cerberus Capital Management, forming a new company called BlueLinx Holdings Inc., headquartered in Atlanta, Georgia.

BlueLinx Holdings Inc is one of the leading building products distributors in the US. The company mostly focuses on such materials as plywood, industrial wood, OSB’s, and some other wooden products used for designing floors and pre-cut houses. BXC also sells roofing and waterproofing materials, as well as external finishing products. The company’s clients are industrial enterprises, retail sellers, industrial premises producers, and dealing chains. In May, the company reported its Q1 earnings, with the gross profit going up by $0.9M to reach $55.3M, YoY, while the net loss was at $13.4M. Such news lead to some negative impact on the share prices, but BXC soon recovered thanks to another piece of news that came out in March and was fully positive.

On Mar 13, BlueLinx Holdings Inc announced acquiring Cedar Creek from Charlesbank Capital Pertners at $413M, which pushed the prices higher by 18% and is still supporting the ascending trend. Same as for Skyline Corporation, BlueLinx Holdings Inc shares traded high ($170) before the 2008 crisis, but fell below $5 after that and started recovering only in 2016. First, the shares managed to break out $5, and then reached $10, still being there before 2018. Good reports on 2017 earnings lead to the price breaking $10, and when the company announced Cedar Creek acquisition, it became one of the leaders in terms of growth.

Technically, the 200-day SMA was broken out in late 2017, which showed the beginning of a new ascending trend, which is right now at its full.

As for insider deals, some members of the Board started buying shares at $8.55 to $9.30 since November, and then continued in March after Cedar Creek acquisition, with the price per share already at $30. Meanwhile, the short float is low, at 3.21%.

BlueLinx Holdings Inc (BXC)

Overall, these major price rises were supported by mostly merger news and good earning reports. Insider transaction analysis is quite important as well, as the members of the board are the most knowledgeable investors in the market. BlueLinx Holdings Inc is a good example, where the board had started buying shares 5 months before the major news came in.

 

Disclaimer

Any forecasts contained herein are based on the authors’ particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 3 rated postsHaving majored in both Social Psychology and Economics, Dmitry went on to continue his education in post graduate. He then worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped him to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. Dmitry is a pro in the financial field who authors articles for various international media. He also holds the position of Chief Analyst at RoboForex.




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Stock Picks: WMB and WELL

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The S&P 500 (SPX) is beginning to slow down as it went as high as 2,790.21 yesterday, June 11, 2018 only to close at 2,782. We continue to expect a slight dip this week to give the 4-day, 8-day, and 21-day moving averages a chance to catch up with the daily candle’s body. Nevertheless, SPX remains bullish so we’ll continue looking for stocks that flash signs of strength.  

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WMB – The Williams Companies Incorporated

The Williams Companies, Inc. (WMB) is a Fortune 500 energy infrastructure company involved in natural gas processing, with interstate gas pipeline and gathering & processing operations in the United States, including the Gulf of Mexico, the Rockies, the Pacific Northwest and the Eastern Seaboard. Founded in 1908, the company operates through segments that include Williams Partners and Williams NGL & Petchem Services. Among its subsidiaries are William Pipeline Partners LP, Northwest Pipeline Corporation, Transco Energy Company, Apoc Oil and Gas International, and Bargarth Incorporated.

Technical analysis show that WMB is creating a large cup and handle reversal structure on the weekly chart. This view comes after the pair generated a higher low of 24 in April 2018. The higher low was affirmed by a rally to 28.23 in May. WMB may have taken a slight dip but it now appears ready to resume its ascent. Furthermore, the attachment of the 4-day and 8-day moving averages to the weekly candle supports this sentiment.

In addition, fundamental analysis show that the trailing twelve months (TTM) price to earnings ratio (PE ratio) of WMB is 11.38.  Therefore, the stock appears to be undervalued considering that it has a five-year maximum of 114.31 and an average of 44.51. Also, its earnings improved from the prior-year figure of 14 cents to 19 cents per share. Based on these figures, the stock has some room to grow.

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The strategy is to buy as close to 26 as possible. As long as the stock is above this level, bulls have the momentum they need to take out resistance of 32 and climb to our target of 50.

The process may take six months.

Weekly WMB Chart

Monthly WMB Chart

As of this writing, The Williams Companies Incorporated stock (WMB) is trading at 26.75.

Summary of Strategy

Buy: As close to 26 as possible.

Target: 50

Stop: Close below 24.

WELL – Welltower Incorporated

Welltower Incorporated (WELL) is a Fortune 1000 Real Estate Investment Trust (REIT) that invests in seniors housing, assisted living and memory care communities, post-acute care facilities, and medical office buildings. Founded in 1970, it now owns interests in properties in the United States, Canada, and the United Kingdom. The company operates in three segments: triple-net, seniors housing operating, and outpatient medical. They include independent and assisted living facilities, care homes and Alzheimer’s/dementia care facilities, and outpatient medical buildings.

Technical analysis show that WELL is poised for a strong bounce play. This view comes after the stock respected the 23.6% Fibonacci level. On top of that, the 4-day, 8-day, and 21-day moving averages are reversing their direction on the weekly chart. This indicates a potential move up.

Lastly, bulls showed up when WELL dropped to support of 50. We can see how the volume on the weekly chart surged when the stock hovered above this level.

Furthermore, fundamental analysis reveal that WELL’s trailing twelve months (TTM) PE ratio stands at 37.13. The stock appears overvalued but it has a five-year average of 65.77 and a maximum of 271.83. Also, its recent earnings report looked promising. Considering these figures, WELL has some upside potential.

The strategy is to buy as close to 57 as possible. If bulls preserve the support, they may spark a bounce to our target of 67.

The process may take three months.

Weekly WELL Chart

Monthly WELL Chart

As of this writing, The Welltower Incorporated stock (WELL) is trading at 58.18.

Summary of Strategy

Buy: Buy as close to 57 as possible.

Target: 67

Stop: Close below 55.

 

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 179 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Stock Picks: Western Digital and Unum Group

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The S&P 500 (SPX) ended the week strong as it closed at 2,779.03 on Friday, June 8, 2018. However, we might see the index take a slight dip this week as the daily candle is detached from the 8-day and 21-day moving averages. Nevertheless, SPX appears to be in a good position to go above 2,800 soon.

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As the index maintains its bullish sentiment, let’s look at stocks showing signs of strength.

WDC – Western Digital Corporation

Western Digital Corporation (WDC) is an American company that develops, manufactures, and provides data storage devices, solutions, and infrastructure. Founded in 1970 as an integrated circuit maker and a storage products company, the firm is now one of the largest computer hard disk drive manufacturers in the world. They operate in three categories: Datacenter Devices and Solutions, Client Devices and Client Solutions. In their extensive portfolio are the brands G-Technology, HGST, SanDisk, and Tegile, among others.

Technical analysis show that WDC has taken out resistance of 80 in March 2017. This triggered the large rounding bottom reversal pattern on the weekly and monthly charts. Currently, the stock is creating a base above 80 after a false break below the support in April 2018. This can be your chance to buy the breakout.

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In addition, fundamental analysis show that the trailing twelve months (TTM) price to earnings ratio (PE ratio) of WDC is 6.02.  The stock is undervalued considering that the P/E of the computer storage devices industry is 16.14. Also, the company reported a strong quarter and increased its profitability outlook. This tells us that WDC has some room to grow.

The strategy is to buy as close to 80 as possible. As long as the stock is above this level, bulls have the momentum they need to climb to our target of 110.

The process may take more than three months.

Weekly WDC Chart

Monthly WDC Chart

As of this writing, the Western Digital Corporation stock (WDC) is trading at 82.62.

Summary of Strategy

Buy: As close to 80 as possible.

Target: 110

Stop: Close below 75.

UNM – Unum Group

Unum Group (UNM) is a Fortune 500 insurance company that provides financial protection benefits in the United States and the United Kingdom. Founded in 1848, they now protect around 33 million people in 181,000 companies globally, through benefits solutions aimed at meeting the needs of both employers and employees. Their operational segments include Unum US, Unum UK, Colonial Life, Closed Block and Corporate.

Technical analysis show that UNUM appears ready for a strong bounce play. This view comes after the stock respected the 38.2% Fibonacci level. On top of that, the 4-day, 8-day, and 21-day moving averages are all detached from the weekly candle. This tells us that the drop is not sustainable. Lastly, UNUM is just hovering above oversold conditions on the weekly chart.

Furthermore, fundamental analysis reveal that UNM’s trailing twelve months (TTM) PE ratio stands at 8.554. The stock appears undervalued considering that its five-year maximum is 25.26. Based on these figures, the stock may have some upside potential.

The strategy is to buy as close to 38 as possible. If bulls preserve the support, they may spark a rally to our target of 46.

The process may take three months.

Weekly UNM Chart

Monthly UNM Chart

As of this writing, The Unum Group stock (UNM) is trading at 39.35.

Summary of Strategy

Buy: Buy as close to 38 as possible.

Target: 46

Stop: Close below 37.

 

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 179 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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