Domestic equity indexes continue to float higher in uncharted territory as corporate earnings results have largely beat expectations, giving investors few reasons to cut winning trades amid the euphoria. Although housing market indicators have cooled off a bit in recent weeks, the Fed’s recent reassurance that it wouldn’t taper prematurely has certainly resonated very well with investors; the S&P 500′s sharp rebound following the “tapering-scare” that ended in late June is a testament that buyers will step in as long as the Fed lifeline is there [for more commodity futures news and analysis subscribe to our free newsletter].
Amid the ongoing rally on Wall Street, bargain shoppers are in search of 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 $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. Lastly, 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].
FMC Technologies, Inc. (FTI)
The Houston-based oil services and equipment manufacturer, FMC Technologies, recently sank below its 50-day moving average. Nonetheless, this stock remains in a strong uptrend over the past year and it could soon find support; notice how FTI previously rebounded off $54 a share in late June. FTI could sink as low as $49 a share and retest its 200-day moving average, which is why we recommend utilizing a tight stop-loss below for those looking to jump right now.
Noble Energy (NBL)
This oil & gas bellwether has been steadily rising over the past year, managing to predictably rebound off its 50-day moving average after virtually every pullback aside from the one in mid-April earlier this year. As such, NBL’s price pattern may soon offer a buying opportunity as the stock approaches its 50-day SMA as well as support between the $57.50 and $60 levels.
Phillips 66 (PSX)
This energy holding company has corrected down to its 200-day moving average over the last two months. Although frustrating, this recent downturn is far from steep, perhaps suggesting that some have been accumulating the stock while it has drifted sideways over the past few weeks. The $55 level plays a major role for PSX because it is a key support level that it previously held above in mid-April of 2013, and it also served as resistance for the stock in December of 2012.
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Disclosure: No positions at time of writing
