Commodity Stocks Ripe For Bargain Shoppers: APC, VLO

Equity 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 [for more commodity futures news and analysis subscribe to our free newsletter].

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 [see How To Lose Money Investing In Commodities].

Anadarko Petroleum (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 a share, which is the level that it recently rebounded off before resuming its uptrend.

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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 a share; we advise setting a stop-loss above $35 a share in case bearish pressures sink this stock past its 200-day moving average.

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Disclosure: No positions at time of writing

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Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

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