STOCK Defensive Plays
The current short-term bias of the stock market is clearly bearish. Therefore, these are bad times for stock portfolios. Nonetheless, die-hard long-term investors move their portfolios to tame or, even, profit in the bad times. That creates good intra-day opportunities for traders since there is a high probability of these stocks to move up during as the rest of the stock market tank.
Our Defensive list:
The Procter & Gamble Company (PG)
PG has been on a bullish trend since may. Although it suffered during the last market drop, it recovered and currently is at new highs. The MACD is decidedly bullish. Its average daily range is more than $1, therefore suited for short-term intraday plays.
American Express (AXP)
AXP is has been moving relatively bullish, although not as much as PG, but, looking at how it is behaving relative to the market we can see it is also a preferred defensive play for institutional investors. The MACD is bullish, although the price is close to the -2 Bollinger line. That means there is a limited chance that the price continues moving down a couple of days to the vicinity of the band mean. Anyway, this stock can be traded intraday with confidence, following the trend exposed by the institutional players.
The Southern Company (SO)
SO, an S&P 500 company, is an American gas and electric utility holding company based in the southern United States. It is currently moving in a bullish cycle. on its daily chart, we can observe the MACD is clearly bullish and not overbought. Although its daily price movement is below $1 profits can be increased using proper leverage.
US Bancorp (USB)
USB is a bank holding company based in Minnesota and incorporated in Delaware. From its daily chart, we observe that it has suffered during the last market drop, but currently, it is moving up quite well. Also, its MACD is bullish and the price inside an upward moving Bollinger Band channel. Leverage will help set the dollar profit target to an appropriate level when traded on short-term plays.
Exelon Corporation (EXC)
Exelon Corporation is an American Fortune 100 energy company headquartered in Chicago, Illinois. It generates revenues of approximately $33.5 billion and employs about 34,000 people. Exelon is the largest electric parent company in the United States by revenue, the largest regulated utility in the United States with around 10 million customers, and also the largest operator of nuclear power plants in the United States. It was created in October 2000 by the merger of PECO Energy Company of Philadelphia and Unicom Corp of Chicago, which owned Commonwealth Edison. (Source: Wikipedia)
The current EXC price is oversold, having touched the +3 Bollinger line yesterday the price created a doji-like spinning top. There is a high chance the stock will follow the general market direction short-term. Therefore, we have here a double way opportunity. We can go long or short on this stock as dictated by the current market conditions.
The Coca-Cola Company (KO)
KO is in the same overbought condition as EXC. Its price has been moving quite bullishly in the latest 15 sessions, surpassing the +2 Bollinger line, and yesterday drawing a spinning top as well. Therefore, we can confidently play long and short positions on this one, although I’d rate the short positions a better probability of success today.
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