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Stock Picks: ORLY and OXY

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The S&P 500 (SPX) have bounced back yesterday, March 5, as it went as high as 2728.09. It did so, however, with below average volume. This suggests that market participants are starting to lose interest to buy at this level. Without considerable volume in the next few days, the index is likely to resume its drop.

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As SPX begins to lose its bullish steam, let’s look at names that are near firm support levels.

ORLY – O’Reilly Automotive Incorporated

O’Reilly Automotive Incorporated (ORLY) is a leading specialty retailer of aftermarket auto parts, tools, supplies, equipment and accessories in the United States. Aside from carrying brand-name merchandise such as Armor All, Bosch, Castrol, Prestone, STP, Turtle Wax, and Valvoline, the company’s stores also offer a wide range of motor shop services and programs like recycling of used oil, oil filters, and batteries; battery diagnostic testing; and electrical and module testing; among others. Originating from one single store in Missouri in 1957, they have now grown to 5,021 locations in California, Missouri, Georgia, Florida, North Carolina, Oklahoma, Wisconsin, Kansas, Nevada and Connecticut.

ORLY started its uptrend in February 2009 when it conquered the 30 resistance level with extremely heavy volume. Since then, the stock has been creating a series of higher highs and higher lows until it topped out in July 2016 when it went as high as 292.84. The stock then created a bearish head and shoulders pattern when it generated a lower high of 286.57 in December 2016. It then broke below 240 support and dived to as low as 169.43 in July 2017.

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Technical analysis show that ORLY is creating a bullish higher low setup at 240. This comes after the target of the head and shoulders structure was achieved when the stock went below 170 in July 2017. The sequence of events tells us that ORLY is about to ignite another bull run.

The strategy is to buy as close to 240 support as possible. If bulls defend this higher low, the stock will use it to breach 280 resistance. Once 280 is taken out, the stock has a clear path to our target of 360. The process may take more than a year.

Weekly ORLY Chart

Monthly ORLY Chart

As of this writing, the O’Reilly Automotive Incorporated stock is trading at 246.58.

Summary of Strategy

Buy: As close to 240 as possible.

Target: 360

Stop: 237

 

OXY – Occidental Petroleum Corporation

Occidental Petroleum Corporation (OXY) is a Fortune 500 oil and gas exploration and production company. Aside from oil and gas, the company also has two other enterprise segments: Chemical, as well as Midstream and Marketing. The former include the production of basic chemicals, vinyl chloride monomer (VCM), polyvinyl chloride (PVC), and resorcinol, and the latter operates pipeline systems, gas plants, cogeneration facilities, and storage facilities. Incorporated in 1986, the company has operations in the United States, the Middle East, and Latin America. This multinational company is Forbes’ number one Most Admired Company in the Mining, Crude Oil Production category of 2018.

OXY launched its bull run in December 2003 with it went above resistance of 20. From that point, the stock generated consecutive higher highs and higher lows until it became toppish at 113.08 in May 2011. It went as low as 63.66 in October 2011, and then it bounced back to resistance of 100 in February 2012. From that point, the stock’s range has been established.

Technical analysis show that OXY may have created a false breakdown when it went below 65 in March 2017. The stock recovered above 65 in November 2017, and went as high as 78.09 in January 2018. Currently, OXY is testing support of 65 and so far it is holding as it is buoyed by above average volume.

The strategy is to buy as close to 65 as possible. If the stock respects this support level, it will climb to our target of 100. The process may take more than six months.

Weekly OXY Chart

Monthly OXY Chart

As of this writing, the Nielsen Holdings PLC stock is trading at 65.99.

Summary of Strategy

Buy: As close to 65 as possible.

Target: 100

Stop: 60

 

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: 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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