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Stock Picks: Bottom Pick SCG and REGN

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The S&P 500 Index (SPX) continues its rampage as it breaks through 2,800 resistance with very little trouble. While bears attempted to defend that level on January 16, bulls came out on top three days later with above average volume. The unstoppable ascent might lure you to invest in bullish stocks that are generating fresh highs. However, it is during market tops that you should practice prudence to protect your capital.  

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If you still want to invest, do so in stocks that near their strong support levels. This limits your risks while providing considerable rewards. Let’s look at names that fit the bill.

SCG – SCANA Corporation

The SCANA Corporation is an electric and natural gas holding company serving the Carolinas and Georgia. Tracing its origins back to the Charleston Gas Light Company 170 years ago, its major subsidiaries include South Carolina Electric & Gas, PSNC Energy, and SCANA Energy. Now with a workforce of nearly 6,000 full and part-time employees, it is continuing its legacy of serving the community through charitable and economic development activities.

SCG went in a downtrend after generating a bearish double top structure at 75 in September 2016. Things went from bad to worse when the stock broke support of 65 in July 2017. From there, SCG created one lower low after another in quick succession. Investors sold their positions with haste. Those who sold, however, lost the opportunity to recoup some of their investments from the impending bounce.

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Technical analysis show that SCG may have bottomed out during the first week of 2018. Volume for that week spiked to over 37 million when the average was only 11 million. More importantly, the stock appears to have generated a false break down at 40. This momentary break in support is known as the Spring pattern, and it usually enables the stock to rally to the top end of the range as sellers lose ammunition.

The strategy is to buy as close to 40 as possible. Should that support level hold firm, our target is the top end of the range which is 65.

Weekly SCG Chart

Monthly SCG Chart

As of January 19, the SCANA Corporation stock closed at 43.35.

Summary of Strategy

Buy: As close to 40 as possible.

Target: 65

Stop: A close below 37 negates this trade call.

 

REGN – Regeneron Pharmaceuticals

Regeneron Pharmaceuticals is a multi-awarded science and technology company that specializes in biopharmaceutics and medical biotechnology. With FDA-approved medicine for asthma, cancer, and infectious diseases along with the VelociSuite biotechnology line, the company founded by physician scientists almost 30 years ago continues to innovate and excel in this field with the aim of pushing the boundaries of science and technology for the global good.

REGN reversed its trend on November 2015 when it posted a bearish double top structure at 590. Its downfall accelerated on January 2016 when it broke support at 520. Within six months, it fell to support of 335. That’s close to 40 percent reduction in value from the 520 high. The positive takeaway is that bulls are intent on defending the 335 support level.

Technical analysis show that REGN has created a bullish higher low set up at 355. In November 2017, the stock posted a hammer candlestick on the weekly chart which indicates the presence of buyers at 355. In addition, volume surged on the week of November 27th, generating close to 8.5 million in traded shares when the average weekly volume stood at 4.03 million. Lastly, RSI seems to respect support at 35. These indicators suggest that REGN has bottomed out for now.

The strategy is to buy as close to 355 as possible. If the market holds this level, our target is the top end of the range at 520. Take note, the market has not yet reversed. We are just playing the bounce.

Weekly REGN Chart

Monthly REGN Chart

As of January 19, the Regeneron Pharmaceuticals stock closed at 371.53.

Summary of Strategy

Buy: As close to 355 as possible.

Target: 520

Stop: A close below 335 invalidates this trade call.

 

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 168 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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  1. dopezone

    January 26, 2018 at 11:09 pm

    Scana tip is great so far!

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Stock Picks

Stock Picks: LUK and MRO

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The S&P 500 (SPX) went as high as 2,742.10 yesterday, May 14, 2018, before succumbing to profit taking. This pullback is healthy given the index’s rally from a low of 2,594.62 on May 3. The bullish outlook remains as long as the SPX remains above 2,680.

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As the index remains resilient, let’s look at stocks flashing signs of strength.

LUK – Leucadia National Corporation

Leucadia National Corporation (LUK) is an American conglomerate and investment holding company. Incorporated in 1968, it is a company focused on return on investment and long-term value. Their financial services business portfolio includes Berkadia Commercial Mortgage LLC, Foursight Capital and Chrome Capital, FXCM Group LLC, HomeFed Corporation, Jefferies Group LLC, and Leucadia Asset Management.

Technical analysis show that LUK is primed to take out resistance of 27. This comes after it created a bullish higher low setup when it dropped to as low as 21.61 on April 6, 2018. The setup was affirmed by a strong bounce to 24.75 on April 9 with volume that’s 173.47% higher than its daily average. Breach of the resistance would trigger the cup and handle reversal structure on the weekly chart.

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Also, fundamental analysis show that the trailing twelve months (TTM) price to earnings ratio (PE ratio) of LUK is 19.66. The stock looks fairly valued based on the PE ratio, but it has a five-year maximum of 171.43. This suggests that investors are willing to pay a premium for LUK shares.

The strategy is to buy the breakout at 27 as long as the stock prints seven million shares on the daily chart. Those who bought the higher low are likely to take profits at the resistance. The stock needs buyers to absorb the selling pressure.

Once bulls take out the resistance, the stock may attract trend followers and momentum traders who may help lift LUK to our target of 39. The process may take more than six months.

Weekly LUK Chart

Monthly LUK Chart


As of this writing, the Luecadia National Corporation stock is trading at 24.57.

Summary of Strategy

Buy: Buy breakout at 27 as long as the stock generates seven million shares on the daily chart.

Target: 39

Stop: Close below 25.2 after the breakout.

MRO – Marathon Oil Company

Marathon Oil Corporation (MRO) is an American petroleum and natural gas exploration and production company founded in 1887. They primarily operate in North America: Eagle Ford in Texas, Permian in New Mexico, STACK and SCOOP in Oklahoma, and the Bakken in North Dakota. The company’s international segment produces and markets crude oil and condensate, NGLs and natural gas outside of North America, and Equatorial Guinea (E.G.). The Oil Sands Mining segment mines, extracts, and transports bitumen from Alberta, Canada.

Technical analysis show that MRO has taken out resistance of 19. This triggered the inverse head and shoulders pattern on the weekly chart. The breakout was affirmed by a rally to 21.68 on May 9, 2018. However, the stock is touching overbought territory on the daily chart. The possible dip should be your opportunity to buy near the breakout point.

Furthermore, fundamental analysis reveal that MRO’s trailing twelve months (TTM) PE ratio stands at 14.68. The stock still looks attractive considering that its five-year maximum is 26.02.

The strategy is to buy on dips as close to 19 as possible. As long as the stock stays above 19, it has the momentum to climb to our target of 31.50.

The process may take six months.

Weekly MRO Chart

Monthly MRO Chart


As of this writing, the Marathon Oil stock is trading at 21.42.

Summary of Strategy

Buy: Buy on dips as close to 19 as possible.

Target: 31

Stop: 18

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 168 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

Stock Picks: KMB and KR

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The S&P 500 (SPX) has finally managed to breakout of a descending triangle formation and negate the bearish outlook that came with a series of lower highs. In addition, the index appears to have broken out of a small double bottom reversal pattern on the daily chart. The breakout can help propel the index to resistance of 2,800.

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With the index showing strength, let’s look at stocks that are flashing bullish signals.

KMB – Kimberly-Clark Corporation

Kimberly-Clark Corporation (KMB) is an American multinational company that is engaged in the production and marketing of personal care products made from natural or synthetic fibers. Incorporated in June 1928, the company has over 42,000 employees working in facilities in 38 countries. Kimberly-Clark’s product portfolio includes brands such as Huggies, Kotex, Kleenex, and GoodNites.

Technical analysis show that KMB appears to be bouncing at the 61.8% Fibonacci level. This comes after the stock printed volume that’s 90% higher than its weekly average. The surge in volume points to the presence of bulls at this price level.

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In addition, the last two candlesticks on the weekly chart are hammers. The long wick below the candle’s body suggests that there are buyers below 104. Lastly, a bullish divergence can be seen on the weekly chart. This is a strong hint that a reversal is in sight.

Also, fundamental analysis reveal that the trailing twelve months (TTM) price to earnings ratio (PE ratio) of KMB is 20.61. The stock may fairly priced based on the PE ratio, but it has a five-year maximum of 79.47. This suggests that investors are willing to pay a premium for KMB shares.

The strategy is to buy at current market price. As long as the stock stays above 100, it has the momentum it needs to rally to our target of 118.50. The process may take less than three months.

Weekly KMB Chart

Monthly KMB Chart

As of this writing, the Kimberly-Clark Corporation stock is trading at 104.90.

Summary of Strategy

Buy: Buy at current market level of 104.90.

Target: 118.50

Stop: Close below 100.

KR – The Kroger Company

The Kroger Company (KR) is an American retail company that operates supermarkets, department stores, jewelry stores, and convenience stores across the company. Incorporated in April 1902, Kroger has grown to become the third largest private employer in the United States with over 443,000 employees to help the company generate a net income of $1.907 billion in 2017.

Technical analysis show that KR has established a bullish higher low setup of 22.85 in March 2018. The move came after the stock generated volume that’s 124% higher than its weekly average. Since then, volume has been declining, which suggests that participants are losing interest to sell at this price level. In addition, KR appears to be respecting the 38.2% Fibonacci level.

Furthermore, fundamental analysis reveal that KR’s trailing twelve months (TTM) PE ratio stands at 11.89. The stock still looks attractive. It appears to have upside potential based on its PE ratio.

The strategy is to buy as close to 24 as possible. As long as the stock stays above 23, it may have the strength to rally to our target of 30.

The process may take less than three months.

Weekly KR Chart

Monthly KR Chart

As of this writing, The Kroger Company stock is trading at 24.57.

Summary of Strategy

Buy: Buy as close to 24 as possible.

Target: 30

Stop: 23

 

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 168 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

Stock Picks: JEC and KSU

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The S&P 500 (SPX) has managed to go as high as 2,683.35 yesterday, May 7, 2018. Bulls, however, failed to stay above 2,680 resistance and the index closed at 2,672.63. Unless SPX can take out 2,680 soon, it will likely break 2,600 support.

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As the index shows further signs of weakness, let’s look at stocks that have broken out of long term consolidation.

JEC – Jacobs Engineering Group Incorporated

Jacobs Engineering Group Incorporated (JEC) is a Fortune 500 international firm that provides technical, professional and construction services to industrial, commercial, and governmental clients. Founded in 1947, the company now has 54,000 employees in over 230 locations across the globe. Jacobs Engineering Group, Inc. operates under the following lines of business: Petroleum and Chemicals, Buildings and Infrastructure, Aerospace and Technology, and Industrial.

Technical analysis show that JEC has breached resistance of 60 in November 2017. The price movement triggered the cup and handle reversal pattern on the weekly chart. The breakout was confirmed by a follow through to 72.18 in January 2018.

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However, the stock has been pulling back. This slight dip could be your chance to buy near the higher low.

Also, fundamental analysis reveal that the trailing twelve months (TTM) price to earnings ratio (PE ratio) of JEC is 30. The stock may look expensive based on the PE ratio, but it has a five-year maximum of 36.44. This suggests that investors are willing to pay a premium for JEC shares.

The strategy is to buy on dips as close to 55 as possible. The stock remains bullish as long as it is above this level. It may have the momentum to reach our target of 84.

The process may take more than six months.

Weekly JEC Chart

Monthly JEC Chart

As of this writing, the Jacobs Engineering Group stock is trading at 56.72.

Summary of Strategy

Buy: Buy on dips as close to 55 as possible.

Target: 84

Stop: Close below 52.6.

KSU – Kansas City Southern Railway Company

Kansas City Southern is a transportation holding company with domestic and international rail operations founded in 1887. The company is focused on connecting the central United States’ commercial and industrial markets with Mexican industrial cities. Kansas City Southern operates through subsidiaries, namely: The Kansas City Southern Railway Company (KCSR), Kansas City Southern de Mexico, S.A. de C.V. (KCSM), Mexrail, Inc. (Mexrail), KCSM Servicios, S.A. de C.V. (KCSM Servicios), Meridian Speedway, LLC (MSLLC) and Panama Canal Railway Company (PCRC).

Technical analysis show that KSU has taken out resistance of 100 in June 2017. This triggered the large inverse head and shoulders pattern on the weekly chart. The breakout was validated by a rally to 114.91 in April 2018. Currently, the stock is still in consolidation. This could be your chance to buy near the support.

Furthermore, fundamental analysis reveal that KSU’s trailing twelve months (TTM) PE ratio stands at 11.64. The stock still looks attractive. It has a lot of upside potential based on its PE ratio.

The strategy is to buy on dips as close to 100 as possible. If bulls preserve the new support, they may finish creating the base before moving to our target of 125.

The process may take more than six months.

Weekly KSU Chart

Monthly KSU Chart

As of this writing, the Kansas City Southern Railway Company stock is trading at 106.89.

Summary of Strategy

Buy: Buy on dips as close to 100 as possible.

Target: 125

Stop: 95

 

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 168 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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