Is sector rotation in play from Technology to Energy or Finance? 3 ideas for next week 06-12-2017

Tech sector (XLK) after being up 20%+ for past year experienced it's worst day (-2.47%) of the year so far along with NASDAQ which has a heavy concentration of Tech Stocks dropping 1.8%. This hints that the volatility is likely going to rise and money is going to flow out of most momentum names in Tech sector. Most pundits believe that sector rotation is in play and are hinting money flow from Tech to sectors that have been lagging.

"There's a rotation from tech into different sectors," said Jones Trading's Lutz, head of ETF trading at JonesTrading. Noting financials and energy, two of this year's laggards, are outperforming Friday.

Three ideas in Energy Sector

Let's take a look at few ideas that I'll be watching in the Energy Sector for next week which are starting to show signs of upward mobility.

I've configured prospecting engine with the following criteria and three ideas surface.

  • Types : Just US Equities
  • Sector : Energy, Finance
  • Price : Min $9
  • MinAvg Volume : 100K
  • Elasticity Reversal : Positive
  • Flux : Min 4

We're going to be looking at these ideas in the chart view.


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CVI - CVR Energy Inc.

There isn't any concrete news on this stocks so we will be using price movement and technicals as our confirmation and ride the tide if sector momentum is in play here.

Elasticity turned positive on Friday so what we're looking for next week is Elasticity to sustain over 0 and rise. $21.50+ is going to a good entry point on a strong volume as it would indicate that there is strength with $23 as first target. Note that short interest on this stock is around 30% so we might see some squeeze coming if the herd of smart and dumb money pile on to this stock to float this up.


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PBF - PBF Energy Inc.

After being on a downward channel for almost seven months PBF Energy has started to peak above the down channel on the daily and Elasticity turned positive on Friday as well. If we analyze a weekly chart, we see double bottom and a bullish signal (doji followed by big green candle). Next week we want to see a confirmation and demand to continue. This means Elasticity should stay positive and price to break above $22.50. Next stops would be $24+.


ATW - Atwood Oceanics, Inc.

Despite the chart showing some sign of life, ATW currently has a pending proposed merger with Ensco Plc ("Ensco") for $10.72/share which I didn't noticed until I started looking further. Who knows if the merger is going to go through or not. So I won't be watching this stock next week. I decided to include this as I've already annotated the charts for Technical demonstration purpose.


That's it for now folks. Happy and Profitable trading for next week.

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Saadey (साँढे)

compsci background, high perf software engineer by profession, fintech fanatic, entrepreneurial, food lover, soylent, traveler, NBA fan, geek, and avid learner.

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