A lackluster start for the market isn’t likely to get in the way of our three Big Stock Charts of the day.
Two stocks from the Energy sector, Chesapeake Energy Corporation (NYSE:CHK) and Kinder Morgan Inc (NYSE:KMI) look to continue their bullish moves higher as oil and earnings fuel their stock prices. In addition, we look at Advanced Micro Devices, Inc. (NASDAQ:AMD), a low dollar semiconductor company that looks to continue its charge higher, despite Intel Corporation‘s (NASDAQ:INTC) post-earnings slump this week.
Advanced Micro Devices, Inc. (AMD)
The semiconductor sector took a little hit earlier this week as Intel’s earnings report took the stock down more than 10%, but there are others in the industry that don’t have the pressures of Intel that are great alternatives, enter Advanced Micro Devices.
As a low-dollar stock, many investors don’t want to mess with the likes of AMD, but this is where the technical opportunity in the semiconductor sector lays. Advanced Micro Devices stock is trading 130% for the year and continues to maintain a strong technical trend. Recently, AMD shares pulled back to their 50- and 20-day moving averages, but these trendlines, which are now both ascending, are acting as support.
The recent decline in volatility of Advanced Micro Devices shares is setting it up for a potential break above its top Bollinger Band. This will set AMD shares back into a parabolic pattern that will likely break through the $8 resistance level the company saw in August.
Analyst hate this stock with only 27% of the coverage in the buy recommendation category, so as soon as Advanced Micro Devices looks like it is going to head above $10, the analyst community will be all over it with upgrades.
Over the short-term, a break above $7 for AMD will fuel moves higher and the $7.10 level is the trigger for the potential parabolic move based on the Bollinger Band activity.
Chesapeake Energy Corporation (CHK)
The oil trade giveth, taketh and now giveth again. Few stocks on our daily list are trading the technicals as well as Chesapeake Energy. A few weeks ago, we covered it as a bullish chart when CHK stock bounced off of its 50-day moving average, soundly. Chesapeake shares ran into chart resistance at $7, at which time we said “get out”.
Now, after another retest of the 50-day moving average, CHK is making another run. This time, the ceiling will be the $7.50 level, another 13% move from its 50-day or 9% from last night’s close. Simple enough, no?
Actually, it may get better. The current move in Chesapeake Energy is just below breaking its top Bollinger Band, a move that could send CHK stock parabolic. The last break of this band was in August, when the shares went on a 20% rally in a little over a week.
Volume is picking up quickly on Chesapeake shares, so CHK stock is revving up on the starting line with a move above $6.95 on a closing basis lined-up to be the trigger.
Kinder Morgan Inc (KMI)
Kinder Morgan threw out a great earnings report that has garnered the attention of Wall Street as we’re seeing a number of upgrades on KMI shares. Technically, it couldn’t have happened at a better time, as Kinder Morgan shares were finding support at the $20 mark, the same tradable support that we saw in early August.
KMI stock is facing challenges as the recent bearish cross under of the 20- and 50-day moving averages is creating a “resistance zone” between $21.60 and $21.75. Kinder Morgan shares are trading a little lower this morning, likely on some profit taking and the weaker open for the market, but the positive upgrades from Wall Street should have some lasting effect.
Volume is picking up on KMI shares, indicating that we may see some migration to the name as oil and energy stocks become less taboo to hold in portfolios. The shares aren’t overbought yet, from a technical perspective, and show upside potential from the technicals for a move to $23.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
