------------ STOCKS TO WATCH - FRIDAY - APRIL 29 -------------------
KWK has formed a near perfect 3 bar reversal pattern. After reaching a recent high, the price pulled back over the next 3 trading sessions in an orderly fashion and did so on light volume. The pull back has come down into a level of support, setting up our 3-5 bar reversal pattern.
Yesterday's narrow range bar is significant because most energy stocks showed wide range bars on above average volume which indicates institutional selling. We're not seeing that same selling with KWK.
Since the energy sector has sold off severely this week, it is oversold in the short term and due for a bounce. This would be the place to expect KWK to follow through with a reversal pattern but let the price come up to us.
stockcharts.com[h,a]daclyiay[d20050129,20050429][pb50!b20!f][vc60][iut!Lah10,30,5!Lc20]&pref=G
Entry target $53.02. Price target $55.00. Initial stop loss $51.70.
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ESV is in the process of establishing a down trend but along the way, we can expect the price to rally. A couple of weeks ago, ESV came down to the 200 day moving average where it rallied over the next week. The price came down to the 200 day moving average again yesterday where it formed a narrow range Doji type pattern. The volatility calmed down and the selling dried up some.
The Doji came at a price support level which adds significance to the importance of the candle. It also comes at a time when the energy sector sold off steeply this past week. The chart pattern is suggesting we could see a short term reversal for a day or two, maybe three or four. (This analysis applies to many of the other drillers as well.)
stockcharts.com[h,a]daclyiay[d20050129,20050429][pb50!b20!f][vc60][iut!Lah10,30,5!Lc20]&pref=G
Entry target $33.68. Price target $35.00. Initial stop loss $32.62.
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EMC has had a 3 bar drop off a recent price high. It followed this pattern with a narrow range Doji on a day when the markets sold off steeply. This represents strength.
With the positive MACD readings, this type of pattern is suggesting a snap back up to new highs. What helps to set this pattern up is the low volume on the pull back or price consolidation, a positive MACD and a strong stochastic reading. All of these components suggest we will see higher prices.
stockcharts.com[h,a]daclyiay[d20050129,20050429][pb50!b20!f][vc60][iut!Lah10,30,5!Lp14,3,3]&pref=G
Entry target $13.02. Price target $14.00. Initial stop loss $12.80.
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HLTH is setting up in a pattern known as a continuation pattern. Since the trend has been up, the trend should continue to be up. After setting a recent price high, price has consolidated above a rising 20 day moving average and did it on low to average volume. All of this is bullish.
The price dropped down to a support level yesterday where a Doji pattern formed. We saw some buying pressure as the price came down to support. This is where you would expect the trend to reassert itself and move higher.
stockcharts.com[h,a]daclyiay[d20050129,20050429][pb50!b20!f][vc60][iut!Lah10,30,5!Lc20]&pref=G
Entry target $9.12. Price target $9.85. Initial stop loss $8.83.
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