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August 30, 2012 / redman59

Low Beta Stock I Like Going Forward

While running a scan that looks for high probability bounce setups it returned only one stock.  What I do like about this scan is that it keeps the returns to a low number so the trader is not overwhelmed with having to go through many charts.  Tonight it returned one stock and that was Duke Energy Corp (DUK).  Looking at the chart I really like it going forward.  What I also like is that the current trade could be attractive to swing and position traders. Swing traders could benefit from a quick bounce and percentage gain while position traders can benefit from its low volatility and healthy dividend.  Below is a picture of the chart with notes on it:

On a non-technical level I like the following stats (courtesy FINVIZ):

  • Trading 14.63x Fwd Earnings and 1.29 P/B
  • Stable and consistent quarterly dividend paying out the last 86 years
  • Liquid with Average 3-Month Volume of 5.22 million
  • Beta of 0.33 (not a volatile stock)

I also went to the iBankCoin PPT to get further stats on the stock (specifically overbought/oversold algorithm) and found that the stock is at and near Oversold levels with a history of bouncing.  The timeframe for the bounce is short by going out a max of 10 days but nonetheless the stock does bounce from technical standpoint and hybrid (technical & fundamental combined) standpoint.  this information would be better suited for the swing trader in my opinion.  Also in the options market there remains a high level of open interest in the Sept/Oct 70 calls and the Jan 70/75 calls.  This is in comparison to the put side.

Going forward I think there is a high probability for a bounce, personally I would like to see today’s high (65.23) taken out before getting long to ensure that selling has succumbed.     Either way I like the stock from a chart structure standpoint as well as oversold triggers and has non-technical events supporting a reason to go long.  As always trade at your own risk.

 

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