Here’s one energy stock that’s working. Take a look at Emerge Energy Services (EMES) (September 20, 2014)
I want to look at Emerge Energy Services ( NYSE:EMES ). This is an IBD 50 stock, and the reason I’m looking at it is because it’s one of the only energy stocks that’s really working; there are others, but guess what? This is the “Chart of the Day” not the “Charts of the Day.” So I’m looking at this one, you can see the 50-day moving average has been pretty good support. Just look at the slope of it though, it had been trading sideways here, then you get your breakout, by the way, a heck of a nice move from below $50.00 to 140.00 this year; if I’d known it was going to do that I would have put all my money in it.
You can see the 50-day moving average was in a pretty nice uptrend and now it’s just flattening out. This doesn’t mean that there’s anything wrong with the stock. What it’s doing is just simply reflecting this sideways consolidation. The stock has been drifting sideways, it’s had a couple little consolidation periods here. So I’m looking at this stock and I see a low risk buy, low risk. I’m not saying that the stock’s going to $180.00, I’m saying that you’re able to buy this stock close to a technical level that matters, which is the 50-day moving average.
You keep your stop just a little bit below these prior lows here, not necessarily the 50-day itself, but just below these prior lows, you’d be risking less than10 percent if you just held this stock until it was stopped out. What you’re doing is, you’re buying the stock close to support, giving yourself a chance to make this money and then if the stock starts moving up then you build a bigger position, build a bigger position; and then once the stock starts to challenge this last high you start watching it carefully; you set a stop on some of your position or perhaps all of it, but typically some of your position, so that if your stock pulls back you’re taking some profits, if the stock continues to go you’ve got a full position and you’re good to go.
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