3 energy stocks to buy on the dip
These picks boast market caps upward of $10 billion, have average daily volumes topping $1 million, and are trading above their 200-day moving averages.
With stimulus fears off investors' minds, for now at least, many are looking ahead to what may inspire the long overdue correction that bears keep dreaming about. The debt ceiling debate in Congress, coupled with looming uncertainty over the new Fed chairman appointment, can certainly bring on clouds of uncertainty.
Amid the brief pause in the ongoing rally on Wall Street, bargain shoppers are in search of trending stocks at attractive levels. Below, our firm takes a look at three big commodity stocks that are trending higher, but have slipped in the last few trading sessions, thereby offering an attractive opportunity to "buy on the dip" in the near future.
The stocks included here are rated as "buy" 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 they are in longer-term uptrends. Finally, 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.
Cabot Oil & Gas (COG)
This stock has been trading above its 200-day moving average consistently along a rising support level since the end of last year. COG has been able to rebound off its rising support line after each pullback, and as such, we feel that traders can favorably position themselves at current levels in anticipation of another rebound. In case of a reversal, we advise setting a tight stop loss at or below $36 per share. See COG's one-year daily performance chart here.
Southwestern Energy Co. (SWN)
This stock hasn't staged a massive rally, but it has been climbing higher along a steadily rising support level; notice how SWN has managed to rebound off its 200-day moving average on several occasions this year. With SWN currently trading near support, we feel that jumping into a long position here is attractive; traders can reap the benefits of a rally in the coming days while still closely managing their downside risk with a tight stop loss. See SWN's one-year daily performance chart here.
Spectra Energy (SE)
This stock appears to have been climbing higher along a fairly steeply sloping support level since the start of 2013. Judging by SE's ability to hold support above $33 per share over the past few weeks, we feel that this stock is poised to remain on an upward trajectory. In case the uptrend reverses, traders should utilize a stop loss at or below recent support around $33 per share. See SE's one-year daily performance chart here.
Editor's note: This article by Stoyan Bojinov was originally published on Commodity HQ.
More from Minyanville
- Apple Whips iPhone Users With Their Own Third-Party Cables
- The Updated Case-Shiller Housing Numbers in 24 Charts
- Market Continues to Look Toppy
Copyright © 2014 Microsoft. All rights reserved.
The solid report comes a month after the retailer closed all of its Canadian operations.
VIDEO ON MSN MONEY
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.