When in doubt, it often helps to start with broad sectors as a way to narrow down the field of potential trades. After all, sector indexes have charts, too…which means that you can apply technical analysis to them as well — rather than combing through thousands of individual charts.
In addition to equities, futures and forex instruments, the Profit Scanner powered by Recognia searches out index signals as well. Here are two sector indexes that are giving bullish signals now and some individual stock plays to consider for each.
First up is the Dow Jones Europe Oil & Gas Index. The European markets had a great session on April 8 — particularly the oil and gas stocks — thanks to news that Royal Dutch Shell plc (ADR) (NYSE:RDS.A) will buy BG Group plc (ADR) (OTCMKTS:BRGYY) for a cool $70 billion.
As a result, the Dow Jones Europe Oil & Gas Index began flashing an intermediate-term bullish signal known as the Diamond Bottom.
The above chart of the Dow Jones Europe Oil & Gas Index is an excellent example of this pattern, which begins during a downtrend. After a broadening pattern of higher highs and lower lows, the trading range eventually narrows after the highs peak and the lows start trending higher. Then the price breaks upward out of the diamond’s boundary lines, marking a reversal to a new uptrend.
The Profit Scanner is expecting significant upside for the Dow Jones Europe Oil & Gas Index; specifically, it’s looking for a move to the 310 – 318 range in the next 81 trading days, or about a 14% – 17% gain from current levels.
To take advantage of this with a stock trade, you may want to consider BP plc (ADR) (NYSE:BP). The London-based oil and gas giant has two intermediate-term bullish signals in play, and its Commodity Channel Index and Momentum indicators both turned short-term bullish this week as well.
The S&P 500 Textiles, Apparel & Luxury Goods (Industry) is also looking ripe for bullish opportunities. On April 7, the Profit Scanner confirmed a bullish Continuation Diamond on its chart that carries 7.5% – 9% upside in the intermediate term.
As you can see in the below chart, the bullish Continuation Diamond begins during a consolidation period as prices create higher highs and lower lows in a broadening pattern, similar to the Diamond Bottom. After the highs peak and the lows start trending upward, the trading range gets narrower, and when the price breaks upward out that range, the stock resumes its prior uptrend.
Along with the index signal, there are several stocks in the textiles and apparel industry that are giving their own bullish signals as well:
- Crocs, Inc. (NASDAQ:CROX)
- Guess?, Inc. (NYSE:GES)
- Lululemon Athletica inc. (NASDAQ:LULU)
- VF Corp (NYSE:VFC)
- Vince Holding Corp (NYSE:VNCE)
All five stocks’ charts are looking extremely bullish this week — lending support to the Profit Scanner’s bullish analysis of the industry and providing several ways to profit from it.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.