The bears are back in town although they are a bit late this
year when you consider the fact that the broad US equity market
sank upwards of 5% in 2012 from mid-September to mid-November,
thanks to mounting fears over the fiscal cliff. Policymakers on
Capitol Hill kicked the can down the road last year, and here we
are again, worrying about our nation's growing debt burden without
a clear plan of action in sight.
The recent pullback on Wall Street has in turn prompted bargain
shoppers to look for trending stocks at attractive levels. Below
our firm looks at two big commodity stocks that are trending
higher, but have slipped in the last few trading sessions, thereby
offering an attractive opportunity to "buy on the dip" in the near
The stocks included here are rated as "buy" candidates for three
reasons. First and foremost, each of these companies boasts a
market cap upwards of $1 billion along with average daily trading
volumes topping the $1 million mark, in an effort to weed out
smaller, more volatile, trading prospects; second, these securities
are trading above their 200-day moving averages, thereby implying
they are in longer-term uptrends; thirdly, these stocks are also
trading below their 5-day moving averages, which makes them
attractive for swing traders looking to buy in before they rebound.
As always, investors of all experience levels are advised to use
stop-loss orders and practice disciplined profit-taking techniques.
Air Products & Chemicals
Consider APD's one-year daily performance chart below.
Click to enlarge
This stock has come down in recent days, but it appears to be
building out a support level that falls in line with its
longer-term uptrend; notice how APD has been climbing higher along
a rising level of support (blue line) since rebounding off its
200-day moving average in late April of this year. Anyone looking
to take advantage of this dip should utilize a stop-loss at or
below $105 per share in case a steeper correction develops.
Consider RKT's one-year daily performance chart below.
Click to enlarge
This stock has endured a steep pullback over the last few weeks,
but it appears to be rebounding in recent sessions off a major
support level; notice how RKT previously managed to rebound off the
$100 level (blue line) in June of this year prior to resuming its
uptrend. Furthermore, the 200-day moving average should provide
further support for this stock, although a close below $100 per
share could welcome accelerating selling pressures.
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Editor's note: This article by Stoyan Bojinov was originally