Thursday, October 10, 2013

3 Smokin' Hot Energy Charts & More

I want to show you charts of three energy stocks, then I have a special surprise. Let's start with Devon Energy ...

(Updated chart)

Check out how Devon fell below its trend line in September.  It hugged it, and looked like it would break down. Nope.  Now, it's trying to get back above that trendline. If it does, a breakout that has been building up all year could be next. If it breaks out, the target is $79.

Devon trades near book value and 10.7 x forward p/e. EPS this year got hammered, which actually makes forward comparisons easier.  EPS next year is expected to rise 28.75%, if things go as expected.

(Updated chart)

Higher energy prices means more business for Parker Drilling. Parker trades near book value, 8.92x forward earnings and at just 0.97 times sales.  EPS this year is up 172.1%, and EPS next year should be up 66.15% (that's a guess, remember). Target on a breakout: $10.75

(Updated chart)

Along with breaking out of an obvious inverse-head-and-shoulders pattern, PetroChina is really cheap.  It trades at 8.78X forward earnings, 0.57X sales, and sports a PEG of 0.96.  Not a lot of earnings growth is expected -- 9.68% next year -- but it sports a 4.11% dividend yield, so you're paid to wait. Target: $148.50

Now, for the special surprise. If you've been reading the financial press, many analysts have been bearish on India.  But that just doesn't line up with this chart of the WisdomTree India Earnings ...

(Updated chart)

I could have used the iShares MSCI India Fund (INDA), but INDA has a lot less volume.  Anyway, the point is that India's market is not acting like the economy there is falling apart. It's acting like things are improving rapidly. It's true that India's trade deficit is improving, so that's good news (unless you're a gold merchant -- the main reason is because the government is stomping on gold imports). The breakout from the neckline of the inverse head-and-shoulders pattern gives us a target of $19.50. 

One last chart -- this is an update of the CEW, which I originally showed you on September 3rd, when I called it "One of the Easier Bullish Bets in a Pricey Market."

(Updated chart)

So, it's up 5% since I recommended it.  Not a huge gain, but considering how the broad markets acted during that time frame, I'll take it. CEW could go higher, but watch that overhead resistance, eh? Take profits, don't be greedy.

By the way, I could show you a bullish gold miner or two, but really, you have to start thinking beyond the miners.  When gold is down $10 on the day when the markets are ralllying big-time, the easiest path for gold in the short-term is lower.

The good news is that should bring us to a great buying opportunity. You know how people like gold for presents?  This year, it can be gold miners at a huge discount.

Anything I put here is for my own entertainment. I am not your investment advisor.  Do your own due diligence before buying anything, and beware of those "face-ripper" reversals of both markets and fortune.

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