Capturing a trade takes a couple of minutes at most, in order to discover those trading opportunities there is a lot of hard work involved. I'll scan every weekend through all the different Industries (I use the GICS classification) and if I'm planning to go long I'll focus on the strongest candidates which, by the way, I post in my Weekend Market Overview.
'Energy Equipment & Services' with a GICS Industry Code of 101010 has a few interesting candidates that I just started monitoring. It's too early to think about trading any of them, this Industry is actually very weak at the moment, but the upside potential if the support holds is quite interesting.
Below you can see the monthly chart and the characteristics that I like about it:
- The 30-month EMA (blue line) has flattened and the stock could be consolidating right below 263.29 , which will be acting as a resistance
- The Mansfield Relative Strength indicator has a clear direction showing strength (the Indicators section of the blog describes all the indicators used)
I'll be monitoring the following three stocks:
- BKR - Baker Hughes (my favorite so far)
- SLB - Schlumberger
- VTOL - Bristow Group
Taking BKR as a sample, the monthly chart shows similar characteristics than the Industry chart, additionally:
- High volume, which could signal an accumulation phase from important Market players.
- There is a good resistance reference at 27.93, the stock tried to break it during 2019 and 2021 without success. The more times a support or resistance get tested, the more significant it is when is finally broken.
There is a big difference between monitoring a stock and actually trading it. Around 95% (maybe more) of the tickers that I monitor I never actually trade them. This Industry caught my attention for now, but anything can happen in the Market, if the downtrend resumes I'll just look for opportunities somewhere else.