The overall Australian market has delivered a pretty dismal performance this year and is down 5 percent year-to-date on the ASX/S&P 200. Despite these conditions there are ways to find stocks with potential.
Take A Closer Look at the Energy Sector
The latter half of the calendar year is typically good for energy prices, so if crude oil can remain above the $US95 per barrel mark, then this should provide support for our energy sector near term.
The energy sector has managed to produce some modest gains and with the crude oil price still hovering around the $US100 mark, stock prices are getting some support.
This week OPEC (The Organization of the Petroleum Exporting Countries) met and failed to agree on any increases in production near-term, which again should be supportive of crude oil prices.
Market Analyser Can Help
You can use the Market Analyser software to identify keys stocks that are exhibiting positive momentum, even though the broader market has been in the doldrums.
Start by using the Watchlist Wizard tool to quickly create a watchlist of stocks from the ASX’s Energy GICS sector. (See below for instructions on using the Watchlist Wizard).
We can then use a simple moving average scan to identify energy stocks that are showing positive momentum. In this sample scan we will look for stocks where the 5 day moving average (MAv) is above the 13 day moving average, which is above the 21 day and the 50 day moving average.
Set up this scan through the Analyser Wizard, a handy tool within the Market Analyser allowing you to easily build custom indicators. For help with this tool check this recent post.
The scan produced the following list:
These are obviously stocks that are currently in play. You may want to research these companies further before entering a trade.
A sample chart of one of the stocks from the above scan is Linc Energy:
Utilitse the features in Market Analyser to scan the markets for your specific trade selection criteria. You will save time and perhaps identify some gems.
For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.
Instructions – Using the Watchlist Wizard
1. In Market Analyser, open a watchlist window by selecting Menu > Watchlist
2. Click on the Watchlists item on the top menu bar, and select Watchlist Wizard.
3. In the Watchlist Wizard window click Next, select Australia from the Countries list, then select ASX Energy (GIC) from the Available Watchlists list on the right of the window.
4. Click the Update button. Your new Energy sector watchlist “ASX Energy (GIC)” will now be available from your watchlist window.
Disclaimer: The information provided within this article is not an invitation to trade a specific stock, but is intended for educational purposes only.
By Michael Hevern
Head of Research