Buy Alert! Upside Breakout in Wildcat Oil Stock

January 2, 2020
By Vlad Karpel

RoboStreet – January 2, 2019

Santa Claus Rally Under Way 

One of Wall Street’s maxims is the unfolding of what is called the “Santa Claus rally” a period of rising stock prices that occurs during the last five trading days of December and the first two days of January. Today will be the last day of the Santa Claus rally, and for the most part – it came and went in textbook form.

The market has entered overbought-territory with rising technical support down at $308.0 for the S&P 500 SPDR (SPY), or roughly 5.0% below its current record level of $324.0. The CBOE Volatility Index (VIX) is also trading back down below 13.0 which has historically been a very short-term red flag for further market gains. Hence, a shallow correction mid-January could unfold that would refresh the primary uptrend. 

 “I’m investing my own money in each and every stock as my AI platform identifies.”

And remember we’re not talking about day-trading here.  I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.

Click Here – To See Where I Put My RoboInvestor Money

The bullish push higher for stocks of late is coming from renewed confidence global growth after the Fed reiterated their neutral stance for 2020 and the phase one deal with China is set to be signed on January 15. Although the deal represents little progress in the key areas of U.S. interests, namely accountability for cyber espionage and forced technology transfer. 

It is understood that phase two will address these matters and not just be a deal for China to buy more farm, energy and manufactured goods and the U.S. to reduce some tariffs on Chinese imports. While both sides state they will address some disputes over intellectual property, this area has no terms set forth and, thus, is just a talking point. 

Specifically, as outlined in a detailed Reuters article, the U.S. suspended planned 15% tariffs that were scheduled to go into effect on December 15 on nearly $160 billion worth of Chinese goods, including cell phones, laptop computers, toys, and clothing. China canceled its retaliatory tariffs due to take effect that same day, including a 25% tariff on U.S.-made autos.

The U.S. Trade Representative’s office said it would cut by half the tariff rate it imposed on Sept 1 on a $120 billion list of Chinese goods, to 7.5% U.S. tariffs of 25% on $250 billion worth of Chinese goods will remain unchanged, providing U.S. negotiating leverage for the second phase of negotiations next year, according to USTR

China has agreed to increase purchases of American products and services by $200 million over the next two years, boosting exports to China by almost double. On the surface, the deal looks constructive, but neither side has released any details of the agreement yet. Chinese officials are describing the deal in guarded terms, not publicly confirming much of Washington’s version – especially on goods purchase commitments.

Coming out of the gate for the New Year, investors flush with cash were eager to put some of it to work in the more economically sensitive sectors – namely technology, energy, industrials, materials, metals, and mining. At a recent count, there is over $3.4 trillion in cash and money markets, the highest level in a decade, and plenty of fuel to keep the rally intact, save for some shallow corrections. 

Oil prices have been trending higher following the attacks on Iranian-back militias in Iraq as a reprisal for a rocket attack that killed an American contractor. The attacks led to an incursion into the U.S. Embassy grounds by demonstrators sympathetic to the militia members, which has oil traders feeling the situation could quickly worsen. WTI crude is trading at $61/bbl. as of yesterday. 

The energy sector has gotten more than a pulse this past week, as several beaten-down stocks have reared up on strong volume as the rotation into value and deep cyclical sectors are gaining favor. Anytime WTI trades above $60 it spurs fresh buying in the sector on the prospect of renewed profitability. 

From my AI indicators, shares of Apache Corp. (APA) are in the spotlight this week. The company is a pure-play on exploration and production of oil and gas in the Permian Basin and Midcontinental/Gulf Coast regions. It also has onshore assets in Egypt’s western desert and offshore assets in the Gulf of Mexico and the U.K.’s North Sea. As of the end of 2018, the company had total proven reserves of $581 million barrels of crude oil and 2.5 trillion cubic feet of natural gas. 

2020 revenues for Apache are forecast to be up year-over-year to $6.5 billion with earnings turning positive. The stock has been crushed as with many E&P energy companies. After trading as high as $135 back in 2011, the stock trades today around $25.50 and pays a 3.95% dividend yield. 

The Tradespoon Seasonal Chart is bullish on Apache, with three out of four probability readings indicating higher prices ahead for the next 20, 30 and 40 days. We highlighted the stock on December 31 within our Active Trader list as a bullish trade. 

When our AI platform generates such strong signals, we’ll be using any opportunities to buy near support levels. If the momentum in the energy patch persists, I would expect Apache Corp. to remain a stock in focus for our trading and investing purposes. And being that the energy sector is very tricky and full of uncertainty, it is essential to have AI-driven tools at work to not only gauge overall momentum but also ferret out the best stock trades with the highest risk/reward potential. 

As the year kicks off of a bullish start, I want to extend an invitation to join our RoboInvestor stock and ETF advisory service as a great resolution to put the power of AI to work in your portfolio. We closed out 2019 with an 88.79% Winning Trades Percentage rate from stocks like JP Morgan, and Microsoft. 

The current RoboInvestor Portfolio is long 17 blue-chip stocks and ETFs that are having a strong Santa Claus rally in themselves. Shares of Target Corp. (TGT), BlackRock Inc. (BLK), Thermo Fisher Scientific (TMO), NXPI Semiconductors (NXPI) and the SPDR S&P Metals & Mining ETF (MME) are hot holdings within the portfolio.

Take the initiative today and join me for what should be another banner year of building wealth with RoboInvestor. My money is hard at work in every trade with gains being realized on nearly every 9 out of 10 trades and I want to share that same success will all readers of this column. Join RoboInvestor today and let’s have a big 2020 together! 

 “I’m investing my own money in each and every stock as my AI platform identifies.”

And remember we’re not talking about day-trading here.  I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.

Click Here – To See Where I Put My RoboInvestor Money

*Please note: RoboStreet is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services.  If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, MonthlyTrader, or RoboInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.

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