Yocum's Weekly Watchlist - 6/27/22 to 7/01/22
The market provided a strong rally to end last week. As we are still in a bear market/trend, it is more likely to be a brief bounce followed by some consolidation before another leg down. This is no guarantee of course though this scenario seems most likely. Many oil & resource names have been hammered the last couple of weeks after being the leaders of the market for some time. I believe many of these names are overextended to the downside and are likely for a bounce. Tech provided the strongest rally last week which makes sense given they have been the hardest hit during this bear market. Before we get to the chart ideas down below, it is important to understand my methodology versus your own. I am simply looking to use trend analysis and strong risk management. You can hit 1 out of every 3 trades but if your average risk-reward ratio is 1:4, you will be profitable. Play the trend, play the probabilities, and always have a plan. Skip to... Stock Spotlight of the Week Bullish Setups Bearish Setups FAQs (ex. EPS, RS, SMR ratings)
Stock Spotlight of the Week
$CF - CF Industries Holdings Sector: Chemical-Agriculture Group IBD Composite Ranking: 99 EPS Rating: 99 RS Rating: 96 SMR Rating: A
CF Industries presents a very high risk-reward opportunity if it can slightly continue its pullback. The weekly 55EMA has been a good test of support and resistance in the past. This EMA also lines up with previous resistance which could turn into new support. There is a key monthly pivot below which could also be played so that needs to be taken into account when planning a trade. CF Industries is about to head into its strongest month of the year over the past 17 years. July has an 81% win rate with a mean +5.5% performance (data via TrendSpider).
$CRK - Comstock Resources Inc.
Sector: Oil & Gas Exploration and Production IBD Composite Ranking: 98 EPS Rating: 99 RS Rating: 96 SMR Rating: A Price is at a key yearly pivot on this pullback to the weekly 34EMA. I'd like to see bullish momentum early next week or then the next best potential long entry would be the 55EMA. It is important to note the recent call flow. As seen on the sidebar, calls heavily outnumber puts.
$CNX - CNX Resources Corp. Sector: Oil & Gas Exploration and Production IBD Composite Ranking: 98
EPS Rating: 82
RS Rating: 94 SMR Rating: A
CNX Resources is retesting a key monthly pivot that happens to line up with a 61.8% fib retracement and the 55EMA. A stop under last week's high with a target of new highs would have around a 1:6 risk-reward ratio.
$RRC - Range Resources Corp. Sector: Oil & Gas Exploration and Production IBD Composite Ranking: 95 EPS Rating: 79
RS Rating: 96 SMR Rating: A
Range Resources like many of the other resource companies found a LOT of volume up +8% on Friday (red volume on weekly though daily volume is very bullish). Like the other charts in this list, this matches up with a key area along with the weekly 55EMA and 61.8% fib retracement level.
$MOS - Mosaic Company Sector: Chemicals-Agricultural Group IBD Composite Ranking: 97
EPS Rating: 81
RS Rating: 92 SMR Rating: A
Mosaic is currently up 18% on the year heavily outperforming the S&P however Mosaic was also up over 100% YTD during April. Currently totes a PE of 7 which is very attractive along with positive trending earnings per share and sales. This is a nice retest of the beginning of this recent bull trend. If this low can be held, a buy here targeting new highs offers more than a 7:1 risk-reward ratio.
$ADM - Archer Daniels Midland Co. Sector: Food-Grain Related Group
IBD Composite Ranking: 97
EPS Rating: 81
RS Rating: 92 SMR Rating: A
Arch Daniels Midland Company like other names on this list is retesting its weekly 55EMA and 61.8% fib retracement. This company ranks 1st in its group and despite the market having a poor first half of the year, it has remained green throughout the year.
$ADBE - Adobe Inc.
Sector: Computer Software-Desktop Group
Adobe has broken a key level dating back to mid-2020. Heavy distribution patterns continue to come in during this downtrend. A retest to that pivot in between the 8/21 EMAs would be high risk-reward short setup.
$PHM - Pulte Group Inc.
Pulte Group has broken a key level that has held since the summer of 2020. This is an attractive spot for a short from a risk-reward standpoint if we can get some bearish price action early this week.
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