Power Stock Setups
February 22, 2022
Below are various names that caught our eye during our research process that might be worth a closer look. It is certainly not an exhaustive list, but should give plenty of names to review and develop a plan around based on your trading style and strategies.
Major high pre-breakout setups and current day Breaks
SEE GATX EAB MATX NTB RS AER SLG
Minor breakouts in a larger range or consolidation in an uptrend
MEI CLS OC ACM ATOM FCFS IOSP THRM TTD HMST ACRS TDC
Breakout setup from a consolidation after a downtrend
WRK GWW JOBS ABG DLX KHC KNSL CLFD SAND
Pullback to potential support zones in an established trend
CSCO SUM TRTN MPWR SMPL
RSI Bull Range Test
Daily or Weekly pulling back to test RSI 40 while in a Bull Range
GEF MLM SLGN GLOB PDCO
RSI Bull Range Shift
Emerging trend with RSI setup to move over 60 after a Bear Range
COMM CTS SON GPK VRTV UFPI REZI KGC SA CMCL INFN XPO R AKR CATO CORT CAKE
Extreme oversold showing short term change in character
All downside setups for near term potential weakness.
GE ICHR SNAP KIDS
Below are verious names that caught out eye during our research process that might be worth a closer look. It is certainly not an exhaustive list, but should give plenty of names to review and develop a plan around based on your trading style and strategies.
Cisco as pulled back from a failed BO that put the daily into a bear range since the beginning of the year. Earnings this week changed that as price gapped higher and held into the end of the week even with the overall market issues. The weekly RSI held its bull range test while forging a fresh RSI Positive Reversal to work with. The Weekly relative Comparative charts in the bottom left shows basing over the last year or so and now reaching the top of the relative ranges well ahead of price. In the bottom right we zoom into the 65min chart with where we see the 5day moving average turning up and Price challenging the AVWAPs from both the highs ad lows of the last quarter. A move over Fridays highs could see solid continuation. If it pulls back to the 56 area I would look for buyers to show up and see if they can defend that level.
Owens Corning gapped higher on earnings helping the daily chart shift to an RSI bull range. After the surge price consolidated into the end of the week, but didn’t give back much so far. The weekly chart still closed strong and looks like it wants to move out of the basing action and start building the right side. The relative comparative chart with the SPY shows a big base break out here as it moved above all the important moving averages including the flat 200sma. Bottom Right shows the 65min chart with the 5day moving average now following price higher and should act as support on pullbacks if buyers are serious.
CommScope working on a trend reversal after strong earnings move that held well into the weakness at the end of the week. Daily chart shows it breaking a long down trend line off the highs that developed this last leg down. As this is happening the RSI is trying to shift to a new RSI bull range on the daily. Now this is tentative, so it will take continuation to fill it out, but that is what we are looking for. Looking at the weekly on the right we see a well defined divergence at the lows and right on the big volume node. With the weekly still in a bear range, we don’t start looking for a move right back to highs, but even a move to the January highs is over 10% from here. This one could pullback some, so be watching for both continuation and pullback entries. Both of the charts on the bottom are 65min views. Price is safely above the AVWAPs and 5day moving average which can be watched on any pullbacks as well as the box area in the chart on the right. A pullback to this zone that finds buyers would be interesting too.
Westinghouse Air Brake Technologies is another name making a big post earnings move that will likely need to be digested in some way, but even if it takes a minute it is setting up a strong weekly breakout that could send the stock to test the highs later in the year. Both the daily and the weekly RSIs are moving over 60 solidifying the RSI bull ranges. The Relative comparative with the SPY made two breakouts on this move too. The 65min level is showing the AVWAPs and 5day moving average are all moving up under price giving some spots to watch if it consolidates or pullback. It can test the gap here, but wouldn’t want to see it closing a lot of it quickly. If so, this likely hangs in this range for a good bit longer.
Bank of NT Butterfield is a small cap bank showing solid strength and paying a 4%+ dividend while you wait to see how this pattern resolves. On the Daily RSI is moving into a fresh bull range after the earnings move right up into resistance. Volume is solid on the move but after that surge it might need to catch its breath before challenging the big weekly level. The relative comparative chart has both IWM and SPY on it showing the relative strength here is not new, but broke out against both recently. The 65min chart in the bottom right has the 5day moving average right up below price, if we lose that, It might head back to test the orange line near the bottom of the surge candle. below that goes back to no mans land.
AECOM is currently forming a pennant in the middle of a large range on the daily chart. During this it moved into a new daily RSI bul range. On the wekely chart a RSI Positive Reversal formed during this action in a strong bull range and price trend. The relative comparative chart is also showing a relative breakout after trending higher for months. It is also notable that the shakout that started this move held right at the rising 200sma. On the 65 minute view in the bottom right we price is above the AVWAs and currenlty tangled with the 5day moving average. a move higher out of this will likel give resolution to the pennat we are seeing.
Ichor Holdings is one of the worse looking semiconductors out there as it sits on a ledge here. This is our short example this week. The daily chart lost the RSI bull range a while back and is now challenging 40 RSI again while the while the weekly chart continues to bounce around below 60. It hasn’t actually lost 40 RSI on the weekly yet, but if it loses this level it will. This is a strong polarity level an may hold, so be tight if you decide to try this one to the downside. The bottom right chart shows you the AVWAPs from high and low of the last quarter as well as 5day moving average (yellow) which are all pointing down. A close over these probably means this thesis is wrong for now.
Cheesecake Factory is working on a trend reversal after the year long weeky downtrend. Daily broke the down trend line before earnings and has seen a mixed reaction since. It is in a fresh RSI bull range and on Nitrous at the moment after moving over the MA bands. Not having a bad earnings reaction to a miss in a tough market may be a message we should hear. The weekly also broke its longer term trend line this week with RSI still in a bear range but leading price handily right now. SPY and IWM relative comparatives are making their own moves supporting the price action too. on the 65 minute chart price continues to ride a rising 5day moving average and well above the AVWAP off the lows which might be a good spot to watch if we get any backfill early week. The negative here is the falling 200sma just above. This might be a battle ground, but a move over would add another piece of evidence to the reversal thesis. A stop on close below 38.50 would cool this one down.
The charts and tickers above are for educational purposes and are not recommendations to do anything. This is just to help show you what we see and then let you take it from there and do your own due diligence. Either build your own trade plan or get with your advisor or broker form one before considering any ideas above.