A Tale of Three Stocks (with Striking Similarity)

Through our blog of 5th November 2014, we had talked about Oil Services industry group and the related ETF which is XOP.

It appeared that XOP had stopped moving down; though Oil as a commodity was still dropping at that time. On the contrary, XOP seemed to be ready to move up – at least enough to give us sizeable profit. That could be traded as Longer Term Stock position. As the Direction Lines were still pointing downward, Superior Profit Traders might not try to take a bullish trade using Options at that time.

What happened next? There was major merger and acquisition attempt news (involving HAL and RIG – two of worlds three largest companies in Oil Services industry group). Several stock in the industry group went up heavily. And that is expected to be positive for our XOP bullish trade set up. You may see how XOP performs going forward.

Meanwhile, today, let’s look at three stocks in the same industry group. You might analyze them using your system. Here I am analyzing them the way we do it at Superior Profit Community.

Stock                       Superior Profit
Symbol                    Stock Analysis

CIE                           Industry: Oil and Gas Exploration.
At Pendulum Low.
Backdrop is Neutral.
Bullish Headwind.
Supported by Memory.
Resistance Memory close by.
Earnings event held support .
Movement bullish.
Last Bullish Stretch Release after earnings is still holding.
Upside to Median Target 103%.
Last day went up by 4.25%.

NBL                          Industry: Oil and Gas Exploration.
At Pendulum Low.
Backdrop is Neutral (bullish Candle).
Bullish Headwind.
Supported by Memory.
Resistance Memory close by.
Earnings event held support.
Movement mixed – Acceleration, Speed bullish. Momentum bearish.
Bullish Stretch Release.
Upside to Median Target 37%.
Last day went up by 3.9%.

WLL                          Industry: Oil and Gas Exploration.
At Pendulum Low.
Backdrop is Neutral.
Bullish Headwind.
Supported by Memory.
Resistance Memory nearby but further away compared to CIE and NBL.
Earnings event held support.
Movement bullish.
Bullish Stretch Release.
Upside to Median Target 59%.
Last day went up by 3%.

Note: I found upside to Median Target from Metastock Xenith. You may use your own source for similar information. I tend to look at it only for Longer Term Investment stocks. For shorter term Swing Trades such data may not be of much use.

What did you think of the three stocks? Are these not striking similarities?

When multiple stocks in same industry group shows this much of similarity does it not give additional confidence to take a trade?

Now, which one to choose if one was to trade only one from this group? You may look at each of them through your own system. I am sharing here the annotated At A Glance Template of CIE.

Based on the analysis and the charts, what might a Longer Term Investor do? They might buy it on Last Day’s Close. Or may buy it on Monday. The fact that upside to target median price is more than 100% for CIE might be an important factor for Longer Term Investors to buy the stock? Also, for CIE, the Stop Loss (as we can see from Superior Profit Hop Off Template) is nearby – giving attractive Reward Risk Ratio. As majority of signals are bullish, this may qualify for a higher probability lower risk trade that we like to trade in Superior Profit Community.

What about Swing Traders using Stocks? Those using Real Time Sonar might have entered the Long Stock position on last day’s Close. Or they may open on next day’s Open using one of the several precision entry mechanics described in Trading Profitably Superior Profit Way book (you may read about these techniques from Education center). As all of these three stocks (including CIE) have Resistance Memory nearby, a Swing Trader may be observant of what happens when price reaches that point. And if already in trade by the time price goes to the Resistance Memory, she may either book full profit or partial profit at that point. Alternatively, Swing Stock Trader could wait for the Resistance to break before entering the trade (it usually helps to remain patient for the right opportunity).

What about Options traders? A Superior Profit Swing Trader using Options might wait patiently and not take a Long position using Call Options – as the stock is still in downtrend. They may wait patiently.

What would you do with these stocks? If anything? What is your system telling you? Once you know your system and have confidence on your system, you would follow it effortlessly. Taking a trade when a signal comes. As Superior Profit Traders do.

Before we end today …. Were you curious how I stumbled upon these three stocks? Did I spend hours researching them? No ! It took me less than 5 minutes using Superior Profit Sonar Program – to check which stocks had Bullish Headwind Signal. Only 6 stocks showed up. Of which, these three were in same industry group and caught my attention. I looked at them through At A Glance, Decision and Map Templates and choose one (CIE) from the three – in less than 10 minutes. That is how we like to select potential trades. Fast and without ambiguity.

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