Connect with us

Stock Picks

Stock Picks: STX and RRC

Published

on

The S&P 500 (SPX) went as high as 2,796.98 yesterday, March 12 but it shed 13 points to close the day at 2,783.02. The index is just a few points shy of breaching 2,800 resistance. It must do so in the next few days, or we might see an increase in selling pressure.

As we wait for the index to give us more clarity, let’s look at names that are near firm support levels.

STX – Seagate Technology PLC

Seagate Technology is an American public limited company (PLC) data storage company. As a global leader in data storage solutions, they have products ranging from hard disk drives (HDDs), solid state hybrid drives (SSHDs), solid state drives (SSDs), peripheral component interconnect express (PCIe) cards and serial advanced technology architecture (SATA) controllers. Incorporated in 2010, the company believes that data storage is not only about archiving, but about harnessing stored information for growth and innovation. Their service portfolio also includes Enterprise Storage, Client Compute products (Desktop and Mobile HDDs and SSHDs), and Client Non-compute products such as video HDDs, surveillance HDDs, Network Attached Storage (NAS) HDDs and Branded Solutions.

STX went in a downtrend in June 2015 when it broke below 50 support. This triggered the toppish head and shoulders pattern. The stock then created a series of lower highs and lower lows until it bottomed out in May 2016 at 18.42. STX rallied and climbed to as high as 50.96 in April 2017. Even though the stock pulled back, it created a higher low at 30.60, which it used to reverse the trend.

Technical analysis show that STX has broken out of large bullish reversal pattern when it took out resistance of 50 in January and February 2018. It did so with above average volume which helped absorb selling pressure. Currently, STX is trading at 60, but it is flashing overbought readings. The next pull back should be a good entry point.

The strategy is to wait for the dip and buy as close to 55 as possible. Once selling is over, the stock may resume its ascent to our target of 80. This may take less than six months.

Weekly STX Chart

Monthly STX Chart

As of this writing, the Seagate Technology stock is trading at 61.04.

Summary of Strategy

Buy: As close to 55 as possible.

Target: 80

Stop: 50

 

RRC – Range Resources Corporation

Range Resources Corporation is an independent natural gas, natural gas liquids (NGLs) and oil company in the United States. Incorporated in March 1980, the company explores, develops, and acquires natural gas and crude oil properties in the Appalachian and North Louisiana regions of the United States. Their culture of good stewardship which incorporates performance, integrity, innovation, and transparency made them one of the top high sustainability scorers in As You Sow’s annual Transparency and Risk in Methane Emissions report.

RRC lost its bullish momentum in June 2016 when it generated a lower high of 46.96. Things took a turn for the worse when the stock broke below 42 support in the next month. This triggered the head and shoulders reversal pattern on the daily chart, which sent the stock into a freefall. The stock has been creating a series of lower highs and lower lows. Recently, however, RRC appears to have shown signs of capitulation.

Technical analysis show that RRC may have capitulated on January 25 when it printed volume of 33.16 million. This is the highest traded daily volume since early 1990s based on the chart. In addition, the stock has also reclaimed 15 support. This support level has been defended by bulls since 2005.

The strategy is to buy as close to 15 support as possible. The stock lost over 68% of its value from the lower high of 46.96. Therefore, the stock might take some time to consolidated before it can march to our target of 30. The process may take more than six months.

Weekly RRC Chart

Monthly RRC Chart

As of this writing, the Range Resources Corporation stock is trading at 15.73.

Summary of Strategy

Buy: 15

Target: 30

Stop: 13

 

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 3.00 out of 51 vote, average: 3.00 out of 51 vote, average: 3.00 out of 51 vote, average: 3.00 out of 51 vote, average: 3.00 out of 5 (1 votes, average: 3.00 out of 5)
You need to be a registered member to rate this.
Loading...

3.7 stars on average, based on 252 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.




Feedback or Requests?

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Analysis

Boeing Still a Good Investment, but Not Now

Published

on

By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

In one of our previous articles, we spoke about the rising demand of pilots and air transportation, which made us focus on relevant companies. Another important aspect here is aircraft, without which no air transportation is possible. So today, we’ll analyze one of the largest aircraft manufacturers out there, Boeing.

Boeing Company (NYSE: BA) is a leading aircraft, military and space equipment manufacturer. Headquartered in Chicago, IL, the company mostly operates in Seattle, WA. Boeing is among the top three military equipment companies in the US by the yearly order volume. Around 50% of the company’s budget accounts for military orders.

Over the last four years, Boeing’s yearly revenue is always somewhere near $90B, while the net profit is steadily growing.

Since 2014, the company’s equity was going down, with the debt growing at the same time, and thus the debt-equity ratio is currently not the best one.

Despite the debt, however, the investors get the dividends regularly, and those have been growing speedily since 2014: from $1.94 per share that year to $6.50 in 2018. Meanwhile, the growing demand led to Boeing supplying 763 aircraft in 2017. This was a record high, and the earnings went up from $4.985B to $8.197. The price per share also rose by over 100%, breaking out $300. In 2018, the company is going to supply 912 aircraft, or 20% more.

Boeing Contracts

Recently, Boeing got a contract for $62.7M which included maintenance and modification of F/A-18 и EA-18G. The contract is expected to be fulfilled by Sep 2019.

Another contract won by Boeing is worth $805M and includes developing, manufacturing, testing, and supplying for pilotless aircraft to the US Air Force by 2024.

The US Air Force also has yet another contract with Boeing, which is worth $9.20B and includes both aircraft and flight simulators. At the first stage, the company will get $813M to supply 351 Advanced Pilot Training aircraft and 46 simulators. The overall deadline is 2034.

This is just to name a few, and still one could clearly understand Boeing has orders for at least the next 10 years.

Boeing is also a significant player in the international military business; with the emerging countries increasing their budgets in the light of global geopolitical uncertainty, the company is sure to get more orders.

Apart from military aircraft, Boeing is planning to launch an air taxi prototype next year, which would carry passengers for short distances, while the company is also determined to create an air transport management system within 5 years.

All this makes the outlook perfect, with both dividends and share prices growing steadily. Technically, however, there is some extreme volatility, which shows investors are uncertain; some are closing their positions to lock in over 100% profit, others are, conversely, buying. This led to the price forming a wide range between $315 and $370. At this rate, it may well reach $400 and then bounce back to $300.

Technical Analysis

In 2016, Boeing shares started rising from $100, with the volumes growing, and reached the high at $350, i.e. those who bought at $100, started selling at $350. This means one should better wait for higher volumes and lower prices, as well as some good news, before buying, rather than going long straight away.

Alphabet Inc (NASDAQ: GOOG) experienced a similar situation, when the price was between $1,000 and $1,200, and then, when good earning reports came out, it reached $1,270. Then, Google shares went down again, and are now trading at $1,150, while being fundamentally very strong. So, it may start rising again soon, but at lower levels.

You remember an old saying ‘Buy rumors, sell facts’, of course. This is true with Boeing as well. The news on the company plans must be already priced into the shares, so before adding Boeing to your portfolio, you’d better wait for some lower prices.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon 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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 5 (1 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 15 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




Feedback or Requests?

Continue Reading

Stock Picks

Stock Pick: General Motors

Published

on

General Motors Company (GM) is an American multinational corporation that designs, builds, and sells automobiles such as cars, trucks, crossovers as well as automobile parts. Its most popular vehicle brands include the Buick, Cadillac, GMC, and Chevrolet.  Currently, GM has a workforce of 180,000 employees across 35 countries. In 2017, the company posted revenues of $145.59 billion.

Technical Analysis of General Motors (GM)

GM has been in a slump since June 2018 when it respected resistance of $45. In as little as four months, the stock lost over 23% of its value. At first glance, it might appear that GM has some more downside potential. A close look, however, reveals that GM is due for a bounce. That’s when our play can come in.

Technical analysis shows that GM is approaching the uptrend support of $33. This support has never been breached since July 2012. Bulls have managed to defend it multiple times and that tells us that they’ll also do the same this time.

On top of that, we can see on the weekly RSI that GM is nearly oversold. This gives us confidence that we can expect some selling relief soon. The oversold conditions plus the increased demand at the support can be the catalysts of a strong rally.

Fundamental Analysis of General Motors (GM)

In addition, we have fundamental analysis to support our bullish view. GM’s trailing twelve month price to earnings ratio is 5.51. The stock is undervalued considering that the PE ratio TTM of the automotive – domestic industry stands at 12.39. The comparison tells us that GM has good upside potential.

Also, our research shows that GM is a fundamentally strong company. In its second-quarter report, GM’s US sales volume was up 4.6% year-over-year. Additionally, sales volume in China was up 4.4%. Lastly, a look at the firm’s income statement shows that GM’s earnings before interest, taxes, depreciation, and amortization (EBITDA) growth rate in the last five years was 17.40% per year. This tells us that the company is generating a lot of revenue at a high growth rate.

The firm’s net income may be suffering due to some external challenges but the figures show that GM continues to deliver solid results. Eventually, these results will be reflected in the stock’s price.

The strategy is to buy as close to $33 support as possible. If bulls can successfully defend the support, then GM might be able to rally to our target of $40. Sell immediately once the target is hit. Keep in mind, we are just playing for the bounce.

The timeline for the target is less than six months.

Weekly GM Chart

Monthly GM Chart

As of this writing, the General Motors Company stock (GM) is trading at $32.65.

Summary of Strategy

Buy: As close to $33 support as possible.

Target: $40

Stop: Close below $32.

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

3.7 stars on average, based on 252 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.




Feedback or Requests?

Continue Reading

Analysis

Investors Getting High on Cannabis

Published

on

By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

A year ago, you would hardly find even the most financially illiterate person in the world that had not heard of Bitcoin or cryptocurrency. Regardless of whether they know what it was — at least they know you can earn money with it!

Opportunities to earn easy money sometimes do appear, but they do extremely rarely, and in this light the crypto boom is often compared to the tulipmania that happened in the 17th century. At that time, speculators with no experience joined the tulip futures trading, which eventually led to a sharp increase in flower bulb prices, while a year later the overheated market collapsed, bringing huge losses to all.

The chance to earn huge profits for people who do not have a close connection with the markets does not appear so often. But for those who work with stocks, such opportunities arise almost every quarter.

The price of bitcoin at the peak of its popularity, when almost everyone knew about it, went up by 2,000%. In the stock market, some companies can yield a return of 1,000% within a week or a month, and there is no need to wait a whole year around.

The last sharp increase in share prices after an IPO, which broke all records this year, was shown by Tilray. Since the IPO on July 19 this year, the stock yielded a return of 1,300% over 2 months, and for those who follow the IPO, there was plenty of time to buy this stock, as the price was at about $20 for about a month.

Tilray is a Canada-based company specializing in cultivation and sale of medical marijuana to consumers and pharmaceutical distributors.

When a stock experiences such a rise, however, it usually falls afterwards, and Tilray was no exception as it lost 50% of its maximum value, although it continues to trade at 600% higher against the initial IPO price.

2018 was a landmark for marijuana manufacturers, as in January California legalized the use of marijuana for recreational purposes. Currently, medical marijuana products can be consumed in 29 US states. It is expected that, by 2022, the marijuana market in the US and Canada will have grown by more than three times.

Tilray is a clear indicator of investors’ interest in such companies. However, it’s not just traders who are interested in marijuana producers. Constellation Brands, one of the largest beer producers in the US, announced its intention to invest $4B into Canopy Growth, another Canadian company. This will allow it to increase its share in Canopy Growth from 8.70% to 38.00%. In the next 3 years, the US company will get the right to buy another 139.7M shares for $3.5B, thereby increasing its stake to the controlling one.

Meanwhile, Microsoft has partnered with the Kind Financial, a US based startup company which develops software for government agencies that control the production and sale of marijuana.

On September 17, rumor had it that Coca-Cola was negotiating with Aurora Cannabis to create a beverage containing cannabis. Most likely, this drink will be used to reduce inflammation, seizures, and as an anesthetic.

All this confirms the interest of large companies and investors in marijuana manufacturers. At this rate, finding a marijuana company and investing your money in it could seem a good idea, but there is a risk of high volatility, just like in case of Tilray, which can put your deposit under serious threat. An easier way would be investing in an ETF with the same companies stocks.

The most interesting ETF in the marijuana industry is ETFMG Alternative Harvest (NYSE: MJ).

According to some sources, since August 22, this fund recorded a cash inflow of $112M, which is about 20% of the total value of its entire portfolio. With the money supply growing, the trading volumes increased up to 10M shares, which is 3 times higher than the volume in July.

The interest towards this ETF was especially frantic when California passed the law early this year: at that time, ETF MJ price rose from $29 to $39. Then, in March, the price tried to go up further, but the volumes stayed low, so the price had to get back and even sank a bit. It was only in August when $27 got broken out, and then the price went well up to reach $45, this time also with increased trading volumes. Currently, the support levels are at $34 and $39. Given the increased volatility, the price is quite likely to go down to $34.

ETF investment has always been considered less risky, and in case we are now on the brink of a marijuana boom, this ETF is certainly going to be the best investment vehicle.

 

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon 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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
3 votes, average: 4.00 out of 53 votes, average: 4.00 out of 53 votes, average: 4.00 out of 53 votes, average: 4.00 out of 53 votes, average: 4.00 out of 5 (3 votes, average: 4.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 15 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




Feedback or Requests?

Continue Reading

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending