Historically oversoldMonthly RSI is historically oversold. AWR has long term federal government contracts. Good long-term growth stock with consistent dividends.
NFA.
Market insights
awr trade
i am taking this trade because AWR is a underrated stock
- breaking out of the zone and the 200
- perfect candle structure
from past performance the stock hates the 200 (should stop if so)
Tp- 92 (50sma)
Tp- 99-100
American States W. $AWR, defensive stock going up after a VCPAfter NYSE:AWR made a good breakout with a break away gap from a Volatility Contraction Pattern, is making a good and strong follow through. Also, the MACD is positive and going up.
The quotient against the SP:SPX shows good realtive strength against the market; IBD Investors gives a 72 relative strength rating, and is #3 in its industry group. NYSE:AWK is leading the price action of the Utility-Water Supply Industry
Now the price is resting between $91 and $88. I will be looking for a breakout above that area to enter a position. With a risk/reward ratio of 3:1 it looks like a good trade. If the price follows through after that breakut I'll add to the position once the price breaks above $96 which is an area of strong resistance.
American States Water Co.Chart pattern: Bull Flag
Entry: 79.26$ (this would end the trend of the correction)
Stop: 76.15$
Target: 89$
Risk/Reward-Ratio: > 3:1
Stopmanagement: Parabolic SAR daily chart default settings
AWR Put spreadAWK put spread cost was 1.82 dec 20 exp
90/85 put spread target gain will be $100 and max loss is $90.
looks like its fading after earnings.
AWR- Up or down?Could be a breakout on... Water lol. Waiting for confirmation, but if tomorrow stays green, we could see retest of top of channel. Otherwise we could see a move to the downside which is probably needed. Will insert weekly view that the lines have been drawn off of.
Cup N Handle Breakout in AWRCup is a 30-40% retracement of previous upswing. Handle 10-20% pullback of previous upswing, with very light volume at end of handle. Entry today at close above top of handle on strong volume.
Why AWR is headed higher Strengths:
- Fundamentals: AWR is outperforming its industry = leader, PE is 25 vs. 19 for industry; total debt/equity is 0.7 vs 1 for the industry; good 5 yr earnings growth, gross margins, and ROE, even though they are slightly less than industry avg, 14%, 45%, and 13% respectively; Institutional ownership is very strong at 66% vs an industry avg of 1%. (source: reuters.com)
- Technical: (1) New 52 wk high as last major swing high (2) Orderly bullish flag off of this swing high with, (3) strong selling volume at the bottom of the flag, indicating seller's exhaustion (4) breakout from the flag with a final push lower on very strong selling volume that was absorbed well = lots of effort no result (5) this final push lower was unable to break the swing low, followed by a strong push up to make a new 52 wk high, completing the cup that only retraced about 30% of the prior upswing (6) small retracement off the high that is very orderly with many overlapping bars and tight closes on (7) decreasing volume, this is the handle of the cup n handle pattern, the handle only has retraced about 10% of the prior upswing.
Weakness':
- Fundamental: I would prefer stronger short interest in this stock to help accelerate any up movement, currently at about 730K shares vs. shares outstanding of 36.7 million; and a short ratio of about 4 days (source: thestreet.com). Almost certain increase in the Fed Funds Rate in December, this could drag the overall economy down. However, this could work out for this stock, given that it is a utility that pays dividends, these stocks do tend to do better during contraction stages.
- Technical: I'm short the S&P 500 (SPY) due to the weakening technical picture of the broad market, appears to be topping and has been trapped in a rather broad sideways channel with large, erratic swings, and recent "death cross" of the 50 SMA below the 200 SMA.
Entry 1 - 42.80 (about 1% premium to swing high), breakout of cup n handle
Target 1 - 51.70 (measured move, AB=CD)
Stop 1 - 39.67 (swing low of handle (6))
Entry 2 - 40.20 (about 1% premium to flag breakout, same area that the handle has found support)
Target 2 - same as Target 1, but with improved R:R ratio due to reduced entry price
Stop 2 - 35.80 (swing low at (5))
AWRAn UP circle has reached to a local high and I expect retarcement to previous highs around 57.30...doji candle after a strong move up...rsi -ve divergence....fibo ext. level has been reached...i will go for it
