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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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3.7 stars on average, based on 169 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: NEM and PXD

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The S&P 500 (SPX) gapped up at the opening yesterday, May 21, 2018. It opened at 2,725.95 which is 12.98 points higher than the May 18 close. This is an encouraging sign for the bulls, especially now that the trade war between the US and China has been put on hold.

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As the index gathers momentum, let’s look at stocks that are showing bullishness.

NEM – Newmont Mining Corporation

Newmont Mining Corporation (NEM) is a mining company that explores for and produces gold and copper. It was founded by Colonel William Boyce Thompson as a holding company for private acquisitions in oil and gas, mining, and minerals enterprises in 1916. As one of the world’s leading gold companies, the Newport Mining Corporation has assets and operates in North America, South America, Asia Pacific, and Africa. To date, Newmont Mining Company has a consolidated gold production of 5.2 million ounces and consolidated copper production of 119 million pounds.

Technical analysis show that NEM is positioning to take out resistance of 45. This would trigger the large cup and handle reversal pattern on the weekly chart.

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To complete the breakout, the stock needs to print volume of at least 7.5 million shares on the daily chart. 45 is a firm psychological resistance as it is the 50% Fibonacci level. Many of those who bought the bottom and the higher low are very likely to dump positions at the resistance. NEM needs buyers to absorb the selling pressure.

Also, fundamental analysis show that the trailing twelve months (TTM) price to earnings ratio (PE ratio) of NEM is 25.24. The stock looks attractive based on its PE ratio considering it is below its five-year maximum of 43.019.

The strategy is to buy the breakout at 45 after NEM generates the prescribed volume. Once breakout is complete, the market will create a new base above 45 before crawling to our target of 70.

The process may take more than six months.

Weekly NEM Chart

Monthly NEM Chart

As of this writing, the Newmont Mining Corporation stock is trading at 39.18.

Summary of Strategy

Buy: Breakout of 45 after NEM generates 7.5 million shares on the daily chart.

Target: 70

Stop: Close below 40 after the breakout.

PXD – Pioneer Natural Resources Company

Pioneer Natural Resources Company (PXD) is a petroleum, natural gas, and natural gas liquids (NGLs) exploration and production company. Formed through the merger of Parker & Parsley Petroleum Company and MESA Inc. in 1997, it now has operations in the Permian Basin in West Texas, the Eagle Ford Shale play in South Texas, the Raton field in southeast Colorado, and the West Panhandle field in the Texas Panhandle.

Technical analysis show that PXD has taken out resistance of 185 and went above the 78.6% Fibonacci level. This triggered the immense cup and handle reversal structure on the weekly chart. The breakout was affirmed by a strong rally to 213.40. At this point, however, the stock is touching overbought territory. The expected pullback could be your opportunity to buy the breakout.

Furthermore, fundamental analysis reveal that PXD’s trailing twelve months (TTM) PE ratio stands at 34.04. While the stock appears to be overvalued, it is actually not. PXD has a five-year average of 73.59. This tells us that investors are willing to pay a premium for PXD shares.

The strategy is to buy the dips as close to 185 as possible. As long as bulls stay above this support, they have all the momentum to move to our target of 240.

The process may take more than six months.

Weekly PXD Chart

Monthly PXD Chart

As of this writing, the Pioneer Natural Resources Company stock is trading at 208.93.

Summary of Strategy

Buy: On dips as close to 185 as possible.

Target: 240

Stop: Close below 180.

 

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 169 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: NOV and PNR

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The S&P 500 (SPX) closed at 2,712.97 on Friday, May 18, 2018. The index appears to be consolidating above the 2,700 support after going as high as 2,742.10 on May 14, 2018. The bullish outlook remains as long as the SPX respects the support.

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As bulls control the index, let’s look at stocks that are showing signs of strengths.

NOV – National Oilwell Varco Incorporated

National Oilwell Varco Incorporated (NOV) is an American multinational corporation that manufactures and provides oilfield equipment and technology. Established in 2005 with the National Oilwell and Varco merger, it operates within the following segments: Rig Systems, Rig Aftermarket, Completion and Production Solutions, and Wellbore Technologies. The company’s product portfolio includes heavy hardware for oil well drilling and complete drilling rigs.

Technical analysis show that NOV has taken out resistance of 43. This triggered the cup and handle reversal structure on the weekly chart. The breakout should attract trend followers and momentum traders, considering that 43 is also the 50% Fibonacci level. A follow through in today’s trading would affirm the breakout.

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Also, fundamental analysis show that the trailing twelve months (TTM) price to earnings ratio (PE ratio) of NOV is 10.22. The stock looks attractive based on its PE ratio considering it is below its five-year maximum is 15.47.

The strategy is to buy the breakout as close to 43 as possible. As long as the market stays above this level, it has all the momentum it needs to climb to our target of 57. The process may take more than three months.

Weekly NOV Chart

Monthly NOV Chart

As of this writing, the National Oilwell Varco Incorporated stock is trading at 43.51.

Summary of Strategy

Buy: Buy as close to 43 as possible.

Target: 57

Stop: Close below 40

PNR – Pentair PLC

Pentair PLC (PNR) is a multinational diversified industrial company. Founded in 1966, it quickly ventured into various industries until settling down in 2004 to focus on two operational segments: Water Quality Systems and Flow and Filtration Solutions. With 130 locations, the company now counts more than 10,000 employees in 34 countries, and offers their products under the following brand names: Pentair Aquatic Eco-Systems, Everpure, Kreepy Krauly, Sta-Rite, Shurflo, Aurora, Berkeley, Codeline, Fairbanks-Nijhuis, Haffmans, Hypro, Sta-Rite, Sudmo, and X-Flow.

Technical analysis show that PNR has taken out resistance of 46. This triggered the large inverse head and shoulders reversal pattern on the weekly chart. The breakout has propelled the stock to as high as 50.26 in January 2018. Fortunately for you, the stock has been pulling back. This is your chance to buy near the breakout point.

Furthermore, fundamental analysis reveal that PNR’s trailing twelve months (TTM) PE ratio stands at 12.56. The stock still looks very attractive based on its PE ratio. It appears undervalued as its five-year average is 21.79.

The strategy is to buy as close to 46 as possible. As long as bulls stay above this support, they have all the momentum to move to our target of 62.

The process may take more than six months.

Weekly PNR Chart

Monthly PNR Chart

As of this writing, the Pentair PLC stock is trading at 46.65.

Summary of Strategy

Buy: As close to 46 as possible.

Target: 62

Stop: 43.50

 

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 169 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: 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 169 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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