The S&P 500 Index (SPX) went as low as 2,665.19 before succumbing to selling and closing at 2,639.44. Volume has been above average for the last four trading days. Bears are taking profits while bulls are aggressively buying. Technical indicators suggest that selling will continue in the following days. As long as the index is above 2,600, bulls are in complete control.
As the index remains bullish, let’s have a look at stocks displaying strong bullish signals.
At first glance, it appears that there’s nothing special about this stock. However, looking as far back as 2000 reveals that the stock went above 100. It massively crashed and plunged to as low as 1.10 in 2002. The stock defended that level and has not looked back since. Today, it managed to create a large bullish pattern that shows the stock quietly reversing its 17-year downtrend.
Monthly and weekly charts show that it is in oversold territory. In addition, it is struggling to reach 33, and that makes sense as monthly charts also reveal that 32.37 as a resistance level. Further consolidation is in order before the stock can make its next move up.
The strategy is to buy the range between 32.37 and 28. Unless GLW can print a volume of 13 million in the daily charts, it is unlikely to run away from us.
Buy: Buy between 32.37 and 28 OR move above 32.37 with 13 million volume.
Stop: A close below 28 invalidates this trade call.
Just like GLW, DVN is coming out of a multi-year downtrend that saw the stock nosedive from 127.43 down to 18.07. That’s a staggering 85.81% loss in value. Nevertheless, things are looking up for the stock as it appears to have established a higher low at 30. Its price action from mid 2015 up to present has created a large reversal pattern that can send the stock above 80.
The strategy is to either wait for the stock to dip to 30 or wait for breakout at 50. It is not recommended that you buy anything in between. That’s a large range, but it pays to be patient if you want to maximize your returns and limit your risks. DVN needs to print 11 million in volume on the daily charts to confirm a breakout at 50.
Buy: Buy breakout at 50 with 11 million volume or wait for the dip to 30
Stop: A close below 30 negates this trade view.
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