BKR: Energy stock has room to out-perform
Updated
Oil related equities demonstrate impressive relative strength to the rest of the sectors, occupying 6 out of 10 best performing market groups.
HAL - is one of the best stocks in the energy sector, with impressive consecutive earnings and sales growth 4 qrts in a row and double digits growth in eps estimates.
Beside strong fundamentals, I always look for the price to establish reliable basing pattern with low risk entry point. Preferably I want this pattern to fit well into the larger elliott wave context, having upside potential within the price structure.
https://www.tradingview.com/x/pXOEoG5V/
Within the structure from 2020 lows, I can see at least one more move to the upside into 40-45-47 area of larger resistance.
Trading plan: if price manages to break out above Friday's highs with volume rising above average, I will be planning to start building the position with 3-5% stop. Further follow-through above 36.2 and later 36.9 area would be a signal to add-on to position.
Other technical signs to consider:
- I was wowed by five (!) consecutive tight weekly closes. History of true market leaders (TML) through out each and every up-cycle teaches us that every TML had 2-3 weeks of tight closes during initial phases of price advance.
- Though afterward breaking out from 5 weeks tight base, price faced 5 weeks of decline below this base, with some signs of distribution. Probable that was due to general market sell-off, but price is still below key 10w. MA, meaning it is still vulnerable to the downside;
https://www.tradingview.com/x/R4PI0bYa/
- I like the break-away gap in the beginning of October - sign of strength.
https://www.tradingview.com/x/0aGVthII/
The short-term potential of the analysis is valid until price stays above Oct. lows.
Caution: Earnings are scheduled next week.
Important notice: Elliot waves and fibonacci retracements are a very subjective form of analysis and I don't personally trade out of them. I use them only for the purpose of gauging structural potential of any assets, that allows me to put more confidence when low-risk trading set-up emerges. Analysis and opinion doesn't pay, only price pays.
HAL - is one of the best stocks in the energy sector, with impressive consecutive earnings and sales growth 4 qrts in a row and double digits growth in eps estimates.
Beside strong fundamentals, I always look for the price to establish reliable basing pattern with low risk entry point. Preferably I want this pattern to fit well into the larger elliott wave context, having upside potential within the price structure.
https://www.tradingview.com/x/pXOEoG5V/
Within the structure from 2020 lows, I can see at least one more move to the upside into 40-45-47 area of larger resistance.
Trading plan: if price manages to break out above Friday's highs with volume rising above average, I will be planning to start building the position with 3-5% stop. Further follow-through above 36.2 and later 36.9 area would be a signal to add-on to position.
Other technical signs to consider:
- I was wowed by five (!) consecutive tight weekly closes. History of true market leaders (TML) through out each and every up-cycle teaches us that every TML had 2-3 weeks of tight closes during initial phases of price advance.
- Though afterward breaking out from 5 weeks tight base, price faced 5 weeks of decline below this base, with some signs of distribution. Probable that was due to general market sell-off, but price is still below key 10w. MA, meaning it is still vulnerable to the downside;
https://www.tradingview.com/x/R4PI0bYa/
- I like the break-away gap in the beginning of October - sign of strength.
https://www.tradingview.com/x/0aGVthII/
The short-term potential of the analysis is valid until price stays above Oct. lows.
Caution: Earnings are scheduled next week.
Important notice: Elliot waves and fibonacci retracements are a very subjective form of analysis and I don't personally trade out of them. I use them only for the purpose of gauging structural potential of any assets, that allows me to put more confidence when low-risk trading set-up emerges. Analysis and opinion doesn't pay, only price pays.
Note
Missprint: HAL --- > BKR Although HAL is among the best also.
Trade active
That would be an ideal path if price manages to break-out above 36 area. Initiated small long position yesterday on favourable reaction to earnings. Looking to add on price strength, especially above 50D average. Very tight 2-3% stops
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