Major US equity benchmarks continue to inch higher into
previously uncharted territory as investors remain hopeful that the
Federal Reserve will remain accommodative and postpone the
much-feared "taper," in light of the recent federal government
shutdown. Upbeat corporate earnings have helped to keep optimism
levels elevated, but a number of bellwethers have expressed global
growth concerns by revising their outlooks lower, making for a very
Amid the "hope" rally and postponed debt-ceiling issue at home,
many remain hesitant to jump in long. As such, below we highlight
two commodity stocks that may offer an attractive short selling
opportunity for those looking to bet against some of the stellar
run-ups already seen across Wall Street.
The stocks included here are deemed to be great trading 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 below their 200-day moving
averages, thereby implying that they are in longer-term downtrends.
Lastly, these stocks are also trading above their five-day moving
averages, which makes them attractive for swing traders looking to
sell short before they resume their downtrend. As always, investors
of all experience levels are advised to use stop-loss orders and
practice disciplined profit-taking techniques:
Consider AEM's one-year daily performance chart below.
Click to enlarge
This stock appears to have carved out a bottom for itself right
around $25 a share, seeing as how it has managed to hold above this
level on several instance this year alone. Although this is
certainly encouraging, AEM remains in a worrisome downtrend as
evidenced by the fact that it has failed to summit resistance (red
line) at $35 a share on two occasions over the past year. This
stock has attracted buyers in recent days; however, the longer-term
downtrend at hand should not be ignored by more conservative
Marathon Petroleum Corporation
Consider MPC's one-year daily performance chart below.
Click to enlarge
This stock may be entering into a downtrend judging by its recent
failure to hold above its 200-day moving average after a rebound
attempt earlier this August. MPC hasn't posted steep losses YTD,
but the stock has posted a series of lower-highs and lower-lows,
which is worrisome because it suggests that bullish momentum is
leaving the security. MPC's recent failure to summit $75 a share on
10/23/2013 is further evidence that bearish pressures are
overwhelming the buyers here.
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Editor's note: This article by Stoy8an Bojinov was originally