By Joey Vazquez
We continue our search for the most technically attractive charts in the market. Today, the markets erased whatever gains we had made from the day before. They also erased any positive thoughts that this bearish market was behind us. Today, I strive to find technically attractive charts that will outperform the markets and charts that look to continue to fall apart in this weak environment. Should you buy or sell the chart?
Sempra Energy (SRE):
On a day that the markets were all down more than 1% SRE was in the positive. Not only does that signify how strong this company is but SRE has not struggled in the month of May like every other company. SRE has been strong during natural gas' strength as well as a solid round of earnings for their latest quarter. SRE did have a couple of weak trading sessions in the middle of the month but support at $63.23 was too strong and it quickly rebounded. Its MACD is on the verge of a crossover signaling its getting ready to explode to the upside in June. Stochastics are pointing straight up and its RSI is at a fair 61.
Trade Idea: I would look to enter a Jun 62.5/60 Bull put spread.
Bristol-Myers Squibb Co. (BMY):
Bristol Myers is another company that has also performed well in this horrible month of May. BMY also received an upgrade to outperform from BMO capital on the 18th of this month. Healthcare companies are always fairly strong during tough times, and BMY has been holding up fairly well due to their low beta. BMY CCI indicator entered the 100 level today indicating the start of a new bullish trend. We also had a MACD crossover giving us another very bullish indicator and stochastics are screaming buy as well. If BMY can stay above its pivot point of $33.55 I would look to go long.
Trade Idea: I would look to go long BMY.
Sears Holdings Corp. (SHLD):
Sears holdings has fell off a cliff since mid-March and not even their latest positive earnings beat on the 17th of this month was able to lift them. The company's slow death is definitely going to continue to hurt share prices. SHLD has not been able to break through its 200 day MA and pivot point the entire month of May and therefore that gives us great resistance at the $57.61-$58.31 area. To add to SHLD's worries, a death cross is about to form giving us just another strong bearish indicator. Its stochastics have already turned down and it looks like its MACD will also plunge beneath its signal line if the weakness continues.
Trade Idea: I would look to enter a Jun 16 62.50/60 Bear call spread.
Cabot Oil & Gas Corp. (COG):
With oil's continued weakness, oil companies continue to be attractive for bearish positions. On top of that, COG has seen two recent downgrades that are signaling analysts are exiting the stock. Cabot Oil & Gas has broken through its 200 day MA and will now look to test its pivot point and 50 day MA where it has had good support. If COG breaks through these two supports it will break down in a hurry. COG has already been downgraded twice this month on the 24th and 25th and its MACD has submerged beneath its signal line. Stochastics are southbound and its CCI indicator is in the -100 are indicating the start of a bearish trend. All these bearish indicators is giving me more reason to believe COG will not bounce of its support and break down.
Trade idea: I would look to go short COG.
Trade with Confidence,