This week, I’ve had a quite a few chart requests for the following stocks and I wanted to post the analysis before Friday’s open. The bulls have made a nice run lately, low volume though, which is a reminder of the previous bull runs over the past year. However, we have technical resistance in the S&P 500 around 1100 that will not be easy to break. If we can break that resistance, we may have a nice bull rally for the short-term however any bearish news, which I feel is always likely these days, could easily dismantle a run to break resistance. Keep that in mind with any chart analysis, as I am still wary of downside risk until I see enough proof that we have bottomed. Below are 3-month charts.
Kodiak Oil (KOG)
A/D Line: continues to move north even when the stock price falls, bullish
ADX: in a bearish trend since early May but looking to signal buy over the next week if it stays on the current path
CMF (21): positive since April but a strong bullish sign would be over .5
MACD: recently signaled buy which could be the lead indicator before the ADX confirms the bullish move
OBV: confirmed all the PPS moves
RSI: In neutral territory, closer to oversold territory
Analysis: KOG looks ripe for a breakout but it may be short-lived, if it does happen, so don’t be greedy in this uncertain market and take some off the table when you can. If we continue on the same path, the ADX will signal buy soon, probably next week, which could see a nice move up. I’d like to see the Bollinger Bands tighter before this move up but in a market like this, this chart is as good as it gets. It seems to be moving near the 100-day moving average for support. Watch for resistance at $3.60, $3.80, and $4 on a breakout.
Gastar Exploration (GST)
A/D Line: continues to trend north
ADX: a buy signal should come soon once the green crosses the red, could see a nice breakout
CMF (21): positive all month and growing, .5 or higher would be very bullish
MACD: a buy signal at the beginning of the month and a confirmation of the ADX line signaling buy could keep this positive a bit longer
OBV: confirmed all PPS moves
RSI: in neutral territory, closer to oversold
Analysis: Similar to KOG, GST looks poised for a breakout based on its current path. This could happen as soon as tomorrow, but is likely to signal a buy on the ADX and show volatility before the new trend is determined. Watch for the MACD to reverse as this could signal the ADX line would be a fake buy signal. $4.25 continues to be a short-term resistance level with only a few low volume buys above it, which may blur the chart for some. After $4.25, $4.75 seems to be the next resistance level.
Sirius XM (SIRI)
A/D Line: trends north but just recently touched even, still has a ways to go before accumulation is considered strong but the uptrend is the start
ADX: bearish sign and growing stronger, unfortunately. ADX line above 50 is a very strong bearish trend
CMF (21): positive since May but not very strong
MACD: could signal buy soon based on current path but would likely need the ADX to help confirm it else it will be short-lived
OBV: confirmed all PPS moves
RSI: in neutral territory, closer to oversold
Analysis: SIRI is a broken chart trying to gain traction once again. It seems to have found support around the 100-day moving average, which is helpful. As the A/D line increases, this will create further strength for SIRI, even if the PPS trends south. The ADX line needs to start reversing soon, as this will continue to put downward pressure on the stock until it does, especially if it trends above 50. I would be sure to take some off the table on any significant moves up, as they could be short-lived until the chart grows stronger. $1.05 and $1.10 seem to be the short-term resistance levels.
Marathon Oil (MRO)
A/D Line: Continues a nice uptrend
ADX: a buy signal should come soon once the green crosses the red, could see a nice breakout
CMF (21): positive for a while, .5 or higher would be very bullish but it is only at .1
MACD: recent buy signal could be helped by the ADX line, if it continues its current path and signals buy.
OBV: confirmed all PPS moves
RSI: in neutral territory, closer to overbought
Analysis: MRO is a relatively strong large-cap stock chart. The ADX line is about to signal buy and this could see a nice short-term pop in the chart, which is more likely to be sustainable unless energy falls hard, again. However, be wary of the RSI getting into overbought territory as it could limit the upside potential and keep a top on the potential price increase. $32.50 and $33 should be relatively strong resistance, per the chart, but the ADX line confirming buy with the other strong indicators should be able to break it.
As always, do your own homework to see if you agree. Join our Live Chat, during market hours, if you have questions. Good luck out there.
Mike
At the time of publication, Kudrna was Long GST and KOG but positions may change at any time.
