The bears are back in town; although they are a bit late this year when you consider that the broad U.S. equity market sank upwards of 5% in 2012 from mid-September to mid-November thanks to mounting fears over the “fiscal cliff.” Policymakers on Capitol Hill kicked the can down the road last year, and here we are again worrying about our nation’s growing debt burden with a clear plan of action in sight [for more commodity futures news and analysis subscribe to our free newsletter].
The recent pullback on Wall Street has in turn prompted bargain shoppers to look for trending stocks at attractive levels. As such, below we take 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 $1 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; thirdly, these stocks are also trading below their 5-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 [see 5 Commodity Trading Mistakes You Could Be Making].
Air Products & Chemicals (APD)
Consider APD’s one-year daily performance chart below.
This stock has come down in recent days, but it appears to be building out a support level that falls in line with its longer-term uptrend; notice how APD has been climbing higher along a rising level of support (blue line) since rebounding off its 200-day moving average in late April of this year. Anyone looking to take advantage of this dip should utilize a stop-loss at or below $105 a share in case a steeper correction develops.
Rock-Tenn Corp. (RKT)
Consider RKT’s one-year daily performance chart below.
This stock has endured a steep pullback over the last few weeks, but it appears to be rebounding in recent sessions off a major support level; notice how RKT previously managed to rebound off the $100 level (blue line) in June of this year prior to resuming its uptrend. Furthermore, the 200-day moving average should provide further support for this stock, although a close below $100 a share could welcome accelerating selling pressures.
Disclosure: No positions at time of writing