1. Without digging too deeply into ConocoPhillips (COP), I wanted to offer a quick opinion on the stock's current dividend. As a reader pointed out on Monday, the stock currently yields more than 5.6%. Unfortunately, that yield accompanies a more than 71% payout ratio. Put another way, COP is paying out a tremendous amount of net income in the form of cash dividends to shareholders.
ConocoPhillips has raised its dividend on an annual basis for 14 years. An impressive streak, to be sure. However, the company will struggle to keep that streak alive (in a fiscally responsible manner) if crude oil remains in the dumps for an extended period of time. COP occupied a top spot in my investment book for a number of years. So I have a soft spot in my heart for the name. But when I'm fishing for dividend-growth stocks, I tend to avoid non-REIT (real estate investment trust), Master Limited Partnerships and utilities stocks that have payout ratios above 60%. Because the higher that payout ratio creeps, the greater the odds the company will be unable to continue to grow their dividend. The bottom line is, if I were interested in increasing my energy-sector exposure, I'd likely sidestep COP and focus more on Exxon Mobil (XOM) or Chevron (CVX).
2. While everyone was focused on Twitter (TWTR) after Tuesday's regular session close, Yelp (YELP) was busy disappointing investors. The stock, having declined rather steadily from near $85 in September 2014, plummeted further -- to $28 -- after the release of its most-recent earnings. I'm not a fan of Yelp, the company. But for the day-timeframe trader, there may be a trade to be had toward $25 to $27.
Yelp broke into a strong bull trend around May 2013, from around $26 to $27. Any backtest of that area may be good for a short-term trade. But just so there's no confusion, I see little to like in Yelp's chart beyond a possible short-term trade. It's in a horrid bear trend that higher-timeframe participants should steer clear of.
3. The iShares Russell 2000 (IWM) was at the top of my watch list on Tuesday as it finally probed beneath its $120 support zone. If you're trading the IWM, that is your do-or-die level. A close beneath $120 would likely find sellers leaning on the Russell toward early- and mid-January support near $114.50.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at email@example.com or posted to my twitter feed @ByrneRWS