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Weekly breakout candidates – BVN , CCU , HIW , WWE

This week I am starting a new exercise consisting is proposing securities that are potential breakout candidates, meaning stocks to play on the long side. I am neither a permabull nor a permabear, but based on the fact that on the long term the stock markets are always trending higher (due to long term economic growth and stock rotations in the indices) there is always a number of stocks that stand out even under bad economic conditions. This said the markets are not in such a dismal condition that you get the baby thrown out with the bathwater but the fact is that if it were not for a few leaders ( the much too popular FANG group ) most of the small and medium stocks are not faring very well and when screening the stock markets my observation is that in the present period of time the overwhelming number of stocks are negatively oriented. Still, there exist a few of them that really distinguish themselves and could become potential market winners. Let us start with the selected stocks that I have picked from the New York Stock Exchange (NYSE). The selection criteria applying the Weinstein technique are the relative strength, the volumes of exchange, the long term trend as identified by the 30-week moving average, and the breakout potential on the price chart.

There are four candidates for the week:

  • Buenaventura Mining
  • Compania Cervecerias Unida
  • Highwoods Properties
  • World Wrestling Entertainment.

Please feel free to ask for any stock chart you would like me to analyze.

Buenaventura Mining

Buenaventura Mining , $BVN , is a Peruvian metals (gold, silver, copper, zinc and lead) producer and the first Latin American mining company to list on the NYSE, starting in 1996.

There is a very clear wedge formation on the weekly chart from which the stock price needs to breakout and if or when this happens it should preferably be accompanied by a burst of volumes.

There is another intermediate resistance line to break that is visible on the daily price chart.

Strategy:
Buy half of position on the breakout around $13.5.
Buy half a position on a retest of the broken weekly resistance line.
Initial Stop Loss order should be placed just below $10/share.

Compania Cervecerias Unida

Compania Cervecerias Unida, $CCU , is a diversified beverage company operating in Latin America.  The Company´s principal licensing, distribution and / or joint venture agreements include Heineken Brouwerijen B.V., Anheuser-Busch Incorporated, PepsiCo Inc., Seven-up International, Schweppes Holdings Limited, Société des Produits Nestlé S.A., Pernod Ricard Chile S.A., Watt´s S.A., and Coors Brewing Company.

There has been some accumulation during the last trough preceeding the breakout from the longer weekly resistance area in the lower $20ies and the stock has now broken out of a shorter consolidation area above $27. Both the relative strength and the trend are very positive, but the volumes are not overly convincing. This may not be preemptive of a trend continuation and it may be a good idea to buy the stock below $28.

Strategy:
Buy below $28.
Initial Stop loss below $23 (low risk) or 25$ (high risk).

Highwoods Properties

Update from 30 Sep 2017: Based on reassesment of the technical criterias following recent price action it is proposed to cancel this long investment  idea. There are better places to go for.

Highwoods Properties, $HIW, owns, develops, acquires, leases and manages properties primarily in BBDs (Best Business Districts) of Atlanta, Greensboro, Memphis, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa.

Stock price has broken out from and retested the $46 area and a second breakout of the $53 area can be expected. Here again this event should preferably be coupled with a significant volume increase.

Strategy:
Buy the breakout in the $53 price area.
Initial Stop loss below $44 (low risk) or 48$ (high risk).

World Wrestling Entertainment

World Wrestling Entertainment, $WWE , is an integrated media organization and global entertainment company.

The relative strength appears very positive but the trend has not yet bent clearly higher and it could still take weeks for a breakout above $23 to take place or it may never happen.

Strategy:
Patiently wait for the breakout and buy half of position above $23.
Buy half a position on a retest of the broken weekly resistance line.
Initial Stop Loss order should be placed just below $19/share.

 

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