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Stock Picks: Buy Altria and Acuity Brands

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The SPX continues its unstoppable rampage as it closed at 2,872.87 on Friday, January 26 to record another fresh high. Volume for the day was slightly above average for a 26-point upswing. This may indicate that there are fewer sellers in the market. As participants hold on to their shares, buyers are driving the index higher with not a lot of volume behind a significant push. As a contrarian, getting caught at the top when the bubble bursts could be catastrophic.  Therefore, it would be advisable to limit your risks so you can preserve both your gains and capital.

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With that in mind, let’s look at some stocks that are near strong support levels.

MO – Altria Group Incorporated

Altria Group Incorporated (MO) is an American corporation that includes Philip Morris USA, U.S. Smokeless Tobacco Company, John Middleton, Nat Sherman, Ste. Michelle Wine Estates, and the innovation company Nu Mark. Dedicated to be the leading company in the field of authorized, non-combustible, and reduced-risk products, they have been actively working with the U.S. Surgeon General and the FDA for the public’s responsible consumption of tobacco, cigarettes, and other related products.

MO posted an all-time high on January 20, 2017. At that point, however, the stock was in overbought territory which forced the market to retreat below 72 on July 26, 2017. Two days later, participants were spooked as the stock lost close to 20% of its value in one day, from a high of 74.17 to a low of 60.01. Many investors were forced to cut their losses as the stock dramatically dropped in such a short period of time.

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The stock eventually established support at 60 on September 22. The stock used the support level to rally and touch resistance of 72 on December 12. While bears still control that level, the charts reveal that they might get overwhelmed soon.

Technical analysis show that the stock has created a large bullish reversal pattern in the daily and weekly charts. In addition, it created a bullish higher low at 68. MO can use this level to take out resistance of 72.

The strategy is to buy as close to support at 70 as possible.  The stock’s extended consolidation level increases its chance to take out 72 in its next move up. Our target is 84 which can be achieved in less than six months.

Daily MO Chart

Weekly MO Chart

As of January 26, the Altria Group Incorporated stock closed at 71.02.

Summary of Strategy

Buy: As close to 70 as possible.

Target: 84

Stop: A close below 67 negates this trade call.

 

Acuity Brands Incorporated

Acuity Brands Incorporated (AYI) is an electronics manufacturing company that specializes in innovative lighting systems founded in 2001. Since then, it has developed a comprehensive portfolio that includes indoor and outdoor luminaries, controls, daylighting, and Internet of Things. They aim to provide intelligent and integrated solutions for companies through subsidiaries such as Sensor Switch Inc., DGLogik Inc., Lighting Control & Design, Inc, and C&G Cardini SA, just to name a few.

AYI went in a downtrend in January 2017 when it gapped down and broke support at 225. The stock tumbled, but it eventually established a new support at 158 in May. The market immediately bounced at that level and went as high as 208.83 in July. However, the bears were determined to defend resistance at 200 so they sent the market back down to around 158 in September and October. Until now, the market is still consolidating at that level.

Technical analysis reveal that bulls continue to defend 158 support. Recently, the stock has bounced again from this level. As bears defend 200 and as bulls defend 158, it appears that the stock is range bound, which is wide enough to generate profits.

The strategy is to buy as close to 158 as possible. Target is the top end of the range at 200, which could be achieved in about three months.

Weekly AYI Chart


Monthly AYI Chart


As of January 26, the Acuity Brands Incorporated stock closed at 168.42.

Summary of Strategy

Buy: as close to 158 as possible.

Target: 200

Stop: A close below 153 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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4.3 stars on average, based on 68 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: Buy SJM and LB

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The S&P 500 (SPX) has recovered big last week after two consecutive large red candles on the weekly chart. Bulls managed to preserve support of 2,600 as the market bounced from a low of 2532.69 even in the midst of heavy selling pressure. In addition, RSI appears to have rallied from a low of 38.33. This is an encouraging sign as it indicates that momentum is creeping up. Nevertheless, the index must move above 2,872 to relieve selling pressure, and keep the uptrend alive.

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As the index still hesitates, let’s look at names that are near their firm support levels.

SJM – JM Smucker Company

J.M. Smucker Company is a 120-year-old company that manufactures and markets fruit spreads, peanut butter, shortening and oils, ice cream toppings, sweetened condensed milk, and health and natural foods and beverages. A household brand name in North American homes, its portfolio includes brands such as Smucker’s, Jiff, Crisco, Pillsbury, R.W.Knudsen Family, and Dunkin’ Donuts. The company is committed to strengthening families through moments shared around memorable, wholesome, and quality meals.

SJM lost its bullish momentum in February 2017 when it generated a lower high of 143.68. This signaled investors that the uptrend that began in August 2012 was over. Many cut their positions as seen on the eleven consecutive red weekly candles that spanned from February to May 2017. While SJM eventually bounced, it generated another lower high of 134.12 in June. From then on, the stock plunged until it bottomed out at 99.57 in November 2017.

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Technical analysis reveal that SJM has broken out of a bullish reversal pattern in December 2017. In addition, it created a bullish higher low set up at 114.33 two weeks ago. These factors suggest that the stock has regained its bullish momentum.

The strategy is to buy as close to 120 support as possible. With a higher low in place, the market will likely start its climb to our target of 155. The process may take six months.    

Weekly SJM Chart

Monthly SJM Chart

As of the time of writing, SJM is trading at 123.72.

Summary of Strategy

Buy: As close to 120 as possible.

Target: 155

Stop: A close below 115 negates this trade call.

 

LB – L Brands Incorporated

L Brands Incorporated is a Fortune 500 fashion retailer American company. One of the leading fashion retail brands worldwide, their flagship brands include Victoria’s Secret, Bath & Body Works, Pink, Henri Bendel, and La Senza. Established in 1963, the company continues its tradition of offering it’s clientele not only high-quality products, but captivating experiences as well.

LB topped out when it posted a lower high of 88.74 in April 2016. The downtrend was confirmed when it breached support of 80 in the same month. Since then, the stock created lower highs and lower lows until it found its bottom at 35 in August 2017. Having lost more than 60% of its value, the stock rallied after bottoming out.

Technical analysis show that LB has also broken out of a bullish reversal pattern when it went as high as 57.19 in November 2017. More importantly, it recently generated a bullish higher low set up at 45. This move may attract more bottom pickers which can inspire a big rally.

The strategy is to buy as close to 45 support as possible. As long as this level holds, the market has momentum to march to our target of 100. The entire process may take one year.

Weekly LB Chart

Monthly LB Chart

As of the time of writing, the L Brands Incorporated stock is trading at 47.97.

Summary of Strategy

Buy: As close to 45

Target: 100

Stop: A close below 42 negates 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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4.3 stars on average, based on 68 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: Invest in HCP and IRM

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The S&P 500 Index (SPX) has bounced from as low as 2,532.69 on February 9 to as high as 2,754.42 on February 16. However, it closed at 2,732.22 on the same day. The price action created a long wick above the daily candle’s body indicating the presence of sellers in the area. More importantly, the daily chart is showing signs of a lower high. Unless SPX can get above 2,872 soon, expect bears to take over, and drive the index down.

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As the SPX is not yet out of the woods, let’s look at issues that are near firm support levels

HCP – HCP Incorporated

HCP Incorporated is an S&P 500 Real Estate Investment Trust (REIT) that serves the healthcare industry in the United States. Since 1985, their services are characterized by high barriers to entry, favorable demographic trends, and solid real-estate fundamentals. Their portfolio includes senior housing, life science, medical offices, and hospitals – one of the largest portfolios in healthcare real estate to date.

HCP exhausted its uptrend in January 2015 when it generated a lower high of 45.16. The bearish move put investors on notice, and in May 2015, the stock broke below support of 36. From then on, it created a series of lower highs and lower lows until it eventually found its bottom at 22.86 in February 2016. The stock bounced after that, but it had trouble closing above 36 in the coming months. As bears defended the critical resistance level, HCP has dropped back down to 22.

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Technical analysis reveal that HCP’s plunge has opened an opportunity for bottom pickers. It appears that the stock is respecting support of 22. Volume surged from 19.72 million to 34.90 million when it touched this level. This shows that bulls are ready to defend the support level. On top of that, the stock is in oversold territory, suggesting a bounce is on the horizon.

The strategy is to buy as close to 22 as possible. Should bulls successfully defend this level, the stock will most likely resume its march towards the top end of our range, and our target of 36. The entire process may take six months

Weekly HCP Chart

Monthly HCP Chart

As of the time of writing, the HCP Incorporated stock is trading at 22.68.

Summary of Strategy

Buy: As close to 22 as possible.

Target: 36

Stop: A close below 21.50 negates this trade call.

 

IRM – Iron Mountain Incorporated

Iron Mountain Incorporated is an information management services company founded in 1959. With a portfolio that includes their trademarked Iron Cloud Storage, information management, digital transformation, secure data centers, and secure destruction. They promise to deliver data protection in various industries including federal government, banking, energy, entertainment, insurance, healthcare, law firms, life sciences, retail, and small businesses.

IRM relaunched its bull run in March 2016 when it breached resistance of 32. The move attracted breakout players, which pushed the stock to as high as 41.50 in August 2016. However, bears defended that major resistance level, which forced the stock to drop to as low as 30.75 in November 2016. With IRM down to a major support level, investors bought positions which enabled the stock to rally and go as high as 41.53 in November 2017. Like clockwork, bears claimed the resistance, and sent the stock back down to 32.  

Technical analysis show that IRM is respecting support of 32. The heavy volume over the last two weeks when the stock dipped to this level validates that assumption. Moreover, the stock is flashing near oversold readings which means a bounce might happen soon.

The strategy is to buy as close to 32 support as possible. Once selling is over, the stock will most likely move towards our target of 41.50. The process might take six months.  

Weekly IRM Chart

Monthly IRM Chart

As of the time of writing, the Iron Mountain Incorporated stock is trading at 33.17.

Summary of Strategy

Buy: 32

Target: 41.50

Stop: A close below 31.5 negates 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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4.3 stars on average, based on 68 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: Buy HST and HBI

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After hitting a low of 2,532.69 on February 9, the S&P 500 Index (SPX) appears to be in the middle of a bounce as it rebounded to 2,672.61 yesterday, February 12. While bulls are still in control, the index appears to show signs of hesitation. Volume is just slightly above the 20-day moving average at 2.687 billion. Moreover, yesterday’s price action created a spinning top candle indicating the presence of sellers above 2,656, and the presence of buyers below 2,636. Today’s candle should provide more clarity on the index’s direction.

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While the SPX hesitates, let’s look at stocks that are near key support levels.

HST – Host Hotels and Resorts Incorporated

Host Hotels & Resorts, Incorporated is a S&P 500 and Fortune 500 real estate investment trust (REIT). As of February 2017, the company owns approximately 53,500 rooms spread in 96 upscale and luxury hotels worldwide. Their committed maintenance of their superior diversified portfolio, disciplined capital allocation, and strong asset management capabilities landed them in RobecoSAM’s 2018 Sustainability Yearbook among the world’s most sustainable companies.

HST lost its bullish steam in March 2015 when it generated a lower high at 21.91. The bearish head and shoulders pattern on the weekly chart was triggered when the stock broke below support of 19 in August 2015. HST plunged as investors started to dump shares. It took the stock five months to find its bottom at 12.17 in January 2016. As the stock bottomed out, the stock quickly rallied.

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Technical analysis show that HST managed to reverse its trend and ignite a bull run when it breached resistance of 19 in October 2017. While the stock reached as high as 21.53 in January 2018, it flashed oversold readings which forced a dip. HST went as low as 18.74 this month before bulls rushed to defend support at 19. This slight correction is your chance to enter the market near a critical support level.

The strategy is to buy as close to 19 as possible. Should bulls successfully defend this level, the stock will most likely resume its march towards our target of 25. The entire process can take three months.

Weekly HST Chart

Monthly HST Chart

As of the time of writing, the Host Hotels and Resorts Incorporated stock is trading at 19.31.

Summary of Strategy

Buy: As close to 19 as possible.

Target: 25

Stop: A close below 18.75 negates this trade call

 

HBI – HanesBrand Incorporated

Hanesbrands Incorporated is an S&P 500 and Fortune 500 American clothing company. They are the world’s leading innovator, manufacturer, and marketer of basic apparel. Included in their portfolio are the brands Hanes, Champion, Playtex, Bali, L’eggs, Just My Size, Hanes Hoisery, Barely There, Wonderbra, Duofold, Aire, Beefy-T, C9 by Champion, Cacharel, Celebrity, Daisyfresh, J.E. Morgan, One Hanes Places, Maidenform, Rinbros, Ritmo, Sheer Energy, Silk Reflections, Sol, Sol y Oro, Tagless, and Zorba.

HBI exhausted its bullishness in November 2015 after posting a lower high at 33.24. It then went in a downtrend after breaking below support of 26 in February 2016. While the stock bounced, it created another lower high at 30.42 which validated the trend. From that point on, the HBI generated a series of lower highs and lower lows until it bottomed out at 18.91 in January 2017.

Technical analysis show that HBI has broken out of the downtrend channel that it respected for almost two years when it closed above 21 in June 2017, effectively reversing its trend. It went as high as 25.73 in September before succumbing to selling pressure. While it retreated, it seems to respect support of 19. More importantly, the stock appears to have capitulated on the week of February 5, 2018 as its weekly volume skyrocketed to 83.558 million when the average was just 33 million.

The strategy is buy as close to 19 support as possible. Once selling is over, the stock will most likely resume its march towards our target at 32.50. The process might take more than one year.

Weekly HBI Chart

Monthly HBI Chart

As of the time of writing, the Hanesbrands Incorporated stock is trading at 19.92.

Summary of Strategy

Buy: 19

Target: 32.5

Stop: A close below 18.50 negates 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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4.3 stars on average, based on 68 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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