The market has been very weak over the last couple of weeks, and this looks set to continue into today with this morning’s gap down. However, The Professor Mike Parks has identified 2 stocks bucking this trend. These 2 companies are much stronger than the market right now, and look set to break out!
United States Steel Corporation (X) produces and sells flat-rolled and tubular steel products primarily in North America and Europe.
Russia has a huge aluminum and steel industry, and due to sanctions, some countries may be forced to buy more U.S-made steel, thus benefiting X. In addition, inflation can benefit commodities companies in that their minerals are worth more which translates to higher revenues and profits! X has already had a nice move off the lows since March, and is now consolidating at the highs!
Here’s the Professor’s take on the Technicals in X sent to subscribers on Friday:
X Daily Chart
Trade Setup:
- Bull Flag: The Bull Flag is breaking out to the upside as buyers start to step in. I expect the momentum to continue here as the bulls look to test the upper pivot levels.
- TTM Squeeze: The TTM Squeeze is red with the momentum histogram starting to climb higher. I want to see momentum turn positive and the squeeze to fire with green dots.
- On Balance Volume: The OBV is almost crossing and trending higher from here. I want to see the crossover and higher values to show the bulls are still in control of the stock.
Trade Details:
- Buy 17 June 36 Call
- Exit : Target 8 pints
ABNB
Airbnb, Inc., (ABNB) together with its subsidiaries, operates a platform that enables hosts to offer stays and experiences to guests worldwide. The company’s marketplace model connects hosts and guests online or through mobile devices to book spaces and experiences. It primarily offers private rooms, primary homes, or vacation homes.
Despite the weakness and bear market in growth stocks, ABNB has been consolidating nicely. It has shown relative strength to its growth stock peers that have been annihilated. This implies that the market may think ABNB is undervalued at these levels.
Furthermore, post-Covid many people have resumed traveling. Whilst other re-opening stocks such as WYNN, EXPE, and the airlines (JETS) have been very weak, ABNB once again is showing relative strength. Perhaps an earnings beat is on the cards? Either way, someone loves ABNB at these levels while other stocks sell off.
Here’s the Professor’s take on the Technicals sent to subscribers on Friday:
ABNB 4 Hour Chart
Trade Setup:
- Cup and Handle: A C&H pattern is a bullish chart that indicates buyers are in control of the stock. At this time, I want to see the line that connects the pivot levels to break showing the bulls are looking for a move to the upside. Where will they go? The measured move of the lowest point of the cup to the resistance level will give the measured move to the upside when extended above the resistance level at the current price.
- TTM Squeeze: The TTM Squeeze is showing green dots with a neutral momentum indicator. This indicator is climbing and I’m looking for higher values to start showing here.
- On Balance Volume: The OBV is positive and climbing here. I want to see this continue and new highs made in the indicator to show the bulls are really sticking around for a higher move.
Trade Details:
- Buy 17 June $165 Call
- Entry $177
- Target $230.75
