2 commodity stocks ripe for bargain shoppers

Anadarko and Valero both have markets caps over $10 billion, and they are trading above their 200-day moving averages and below their 5-day moving averages.

By Minyanville.com Jun 13, 2013 3:23PM
 Oil drums, Kevin Phillips, Digital Vision, age fotostockEquity markets are slowly and surely finding their footing following the pullback seen in early June after Fed stimulus fears resurfaced. The continuation of upbeat economic data releases has made it hard to stay on the sidelines, although an improving outlook for the U.S. recovery is making some investors worried that the Fed's "exit plans" could rattle confidence and spark a massive amount of profit-taking.

With more upside on the horizon, at least until the next Fed policy meeting in June, bargain shoppers remain on the prowl for attractive opportunities. As such, below we take a look at two big commodity stocks that are trending higher, highlighting two "buy on the dip" opportunities.

The stocks included here are deemed to be great trading candidates for three reasons. First and foremost, each of these companies boasts a market cap upwards of $10 billion along with average daily trading volumes topping the $1 million mark, in an effort to weed out smaller, more volatile, trading prospects. Second, these securities are trading above their 200-day moving averages, thereby implying that they are in longer-term uptrends. Lastly, these stocks are also trading below their five-day moving averages, which makes them attractive for swing traders looking to buy in before they rebound. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.

Anadarko Petroleum Corporation (APC)
Consider APC's one-year daily performance chart below. It's no secret that APC has been enjoying a stellar uptrend for the past year, managing to rise steadily with brief pullbacks along the way. This stock has a history of nicely rebounding off its 50-day moving average (blue line), although there are a few instances where it has deviated even lower, but the fact that both its 200-day and 50-day moving average are trending higher is bullish. APC has been sliding lower over the past two weeks, but it appears to be holding above $85 per share, which is the level that it recently rebounded off before resuming its uptrend.
Valero Energy Corporation (VLO)
Consider VLO's one-year daily performance chart below. At first glance, some might be worried that VLO has been sliding lower for three months now. However, notice that this stock exhibited a similar price pattern back in September-November of last year when it pulled back near its 200-day moving average (yellow line) only to resume its longer-term uptrend in the months following. VLO offers an attractive entry point for longer-term investors seeing as how it offers lucrative upside and is trading near a major support level around $38 per share. My firm advises setting a stop-loss above $35 per share in case bearish pressures sink this stock past its 200-day moving average.


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

125 rated 1
264 rated 2
485 rated 3
679 rated 4
640 rated 5
617 rated 6
632 rated 7
493 rated 8
276 rated 9
153 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.