Markets continued to bounce today and it appears we are at a turning point for many stocks. Most are still consolidating and forming bases but others are flashing early buy points. It’s still early so we’ll have to wait and see if the major indexes confirm by breaking above their moving averages, because if they turn lower they’ll drag most stocks down too.

This week have been predominately ruled by the energy sector along with basic materials like coal, metals, and agricultural inputs. I noted on Sunday that energy looked set up for a leg higher. That proved true as energy stocks have broken out this week in a big way, driven by oil prices going parabolic up over 15%. The stocks I mentioned are all up between 4-8% from the noted buy points with more room to go.

Tonight we’ll cover updates on the current energy positions along with a few others ready to break out, plus more stocks in other sectors to consider. Let’s get into it!

Index Update

The Nasdaq continues to hold it’s lows from last week and is now consolidating just below the falling 21-day moving average in purple. Net highs/lows are back in the neutral category after posting a net high on Monday but net lows on Tuesday and today. I’m watching for a break above the 21-MA which is where is looks like this index is headed next.

The S&P-500 also looks to be setting up for a move above its 21-day moving average and then could be headed for the 200-day MA and descending trendline. These areas should prove as heavy resistance so it may provide a good area to take profits on any long positions.

Portfolio Update

YTD Return: 3.45%

YTD S&P-500: -7.93%

My Positions

Canadian Natural Resources (CNQ) crossed up through my $55 buy point on high volume on Monday and that’s where I picked it up. Stops at $54.

RPC Inc (RES) is another oil company I bought on Monday morning around $8.40 as it continued higher on above-average volume. It almost hit my stop at $8.15 on Tuesday but closed over 8% higher today.

ConocoPhillips (COP) is a leading energy stock that broke out on Monday. I bought it near the close at $94 as the volume on the day was stellar. It’s now 4% higher after two fantastic follow-through days. Stops at $94 just in case.

Global Ship Lease (GSL) is in a hot sector and reported stellar earnings this morning to the tune of 202% year over year earnings growth, which was over 100% higher than expectations. I bought it near the end of the day as it passed up through my $27 buy point on its highest volume in 52 weeks. Stops at $26.70.

Best Setups

NexTier Oilfield Solutions (NEX) is one from Sunday that I noted I’d “look to buy if it’s moving higher on volume”. I missed the buy as I was focused elsewhere but it’s over 11% higher. Move stops up to even if you’re in.

Hess Corp (HES) tightened up nicely and traded up through my $97.50 buy point on Monday. It’s over 5% higher and looks ready for more. Move stops up to even if you’re in.

Vaalco Energy (EGY) printed an inside-day on Friday in a flag pattern and on Monday it broke out above my buy point at $5.50 on high volume. It’s over 8% higher so move stops up to even.

Now let’s look at a few more energy names to consider if the sector is holding up tomorrow.

Earthstone Energy (ESTE) has been moving up on high volume but faces a major resistance at $14, which is also the high of today’s inside-day. If it can break above this on heavy volume, I’ll be a buyer with stops $0.50 lower.

Laredo Petroleum (LPI) is still consolidating below the buy point of $80 which is a major resistance area. Volume has ticked much higher recently. Look for heavy volume above the buy point and place stops at $78.

Chieniere Energy (LNG) doesn’t have the best pattern as it’s a bit choppy, but it’s a bull flag nonetheless. It printed an inside-day today which shows a tightening of the price action. The buy point is a move above $134 on above-average volume with stops at $130.

Beyond energy, here are a few stocks to watch for the rest of the week.

Global Foundries (GFS) is a semiconductor company that is showing solid buy volume off of the bottom. It’s flashing a double bottom W pattern with a buy point of $61 if accompanied by high volume. Having two inside-days in a row is a constructive characteristic as well.

Vivid Seats (SEAT) is a newer issue and a reopening play that broke out of a nice double bottom pattern today at $12. You could pick it up here or on a slight dip to $12 with stops at $11.80.

Upstart (UPST) is more of a bounce idea but it traded on the highest volume ever after a great earnings report a few weeks ago and is holding up well. If the market is also moving higher, this could run up to it’s 200-day MA or higher, so my buy point is a move through $161 on heavy volume.

That’s all for tonight! If you liked this column or have any feedback about the content, hit me up on Twitter with the link below or respond to this email.

See you back here on Sunday night for an update on our stocks.

Cheers,

Danny Deals