When I'm looking for a trade, I prefer looking at stocks that are undergoing symmetrical corrections within a trend -- that is, corrections that are very similar in price to one another. ConocoPhillips (COP) is such a stock. I do not see any "official" 30-minute buy triggers in this one just yet, but I am stalking it for the following reasons.
First, let's look at a weekly chart, which is showing a clear pattern of higher highs and higher lows. ConocoPhillips is currently testing the top end of a support decision that comes in between $68.53 and $69.78. I've calculated most of this support cluster by measuring a number of prior corrective declines within the bigger-picture uptrend.
As for the daily chart, it illustrates much of the same support seen on the weekly, with a few added price relationships that come in from some of the smaller or more recent swings.
Now, at this point, the price is only above the 200-day simple moving average. Shares are below the 50-day SMA, and the five-day exponential moving average hasn't yet crossed above the 13-day EMA -- an indicator I like to use. In other words, we are not yet seeing a signal, or a trigger, for a safe buy entry.
When these averages are on your side, that certainly presents a more ideal scenario. But keep in mind that my last setup in Facebook (FB) was in a similar place, and the stock still managed to hold above key support. Initially, when I put out a Facebook buy zone on my Twitter (TWTR) feed, the stock was trading below the 50-day SMA -- and the five-day EMA was below the 13-day, favoring the bears.
As you can see, Facebook did overcome those hurdles. When you're sizing up a stock setup like this, what's most important is that your risk is clearly defined.
Returning to the ConocoPhillips setup: Regarding the time axis of the market, I'm also looking at a few cycles due between Dec. 10 and Dec. 13 that are likewise suggesting a possible low and reversal.
Bottom line: I am stalking ConocoPhillips on the buy side, and am looking for a trigger on the 30-minute chart before I'll be willing to place a bet. If I do get triggered into the buy side, my risk can be defined in one of two ways: either below the low made before the buy trigger fired off, or below the price cluster zone of support. If the most recent low remains intact, the potential upside target will comes in at the $75 handle.
Let's see if this one triggers an entry. Typically I use options spreads, keeping my target for the trade in mind when choosing the strategy.
For more information on trade triggers, please refer here.