Big Tobacco stocks ran into some trouble in late October after the latest Federal Reserve meeting. With the idea of a December rate hike gaining traction, tobacco stocks lost some of its appeal among dividend-seeking investors.
However, fortunes have recently started looking up for Big Tobacco stocks.
From its nightly scan of the markets, the Profit Scanner powered by Recognia has spotted bullish chart patterns for three major tobacco stocks.
Read on for details.
Tobacco Stocks on the Comeback Trail: Altria Group Inc (MO)
First up is Altria Group Inc (MO), formerly known as Philip Morris. On Nov. 9, MO completed a bullish Inside Bar, a clear signal that the prior downtrend is losing steam.
This chart pattern forms when the daily trading range is completely engulfed by the prior bar — essentially signaling the formation of a bottom, opening the door for the bulls to overpower the bears.
In the short-term, keep an eye on MO stock for further upside.
Tobacco Stocks on the Comeback Trail: Reynolds American, Inc. (RAI)
Things are looking up for Reynolds American, Inc. (RAI), too. On Nov. 11, shares of RAI crossed above their 50-day moving average as RAI stock makes a bullish push to maintain upward momentum.
For those less familiar with technical analysis, moving averages essentially sift through the the “noise” on a stock chart, allowing prospective investors to easily spot underlying trends.
A share price crossing above a moving average implies an established uptrend. Shorter time frames — an 18- or 21-day MA, for example — imply short-term upside. A cross above the 200-day MA, however, would be a longer-term event.
In this case, the fact that RAI overtook its 50-day moving average is an intermediate-term bullish signal.
Tobacco Stocks on the Comeback Trail: Philip Morris International Inc. (PM)
Philip Morris (PM) — formerly the non-U.S. division of the rebranded Altria — is shaping up to be an attractive investment for the intermediate term as well.
On Nov. 6, PM enjoyed a bullish triple moving average crossover: Specifically, the 4-week MA in PM stock crossed above its 9-week MA, which then crossed above the 18-week MA.
That said, PM’s chart isn’t looking entirely rosy.
On Nov. 9, there was a bearish triple moving average crossover involving the 4-, 9- and 18-day moving averages. That’s a very short-term signal. So with the longer-term bullish event still in play, bulls could look at this as a chance to pick up PM stock on the cheap.
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.