Cabot Oil & Gas (COG) – Technically Ready For A Breakout

Good afternoon everybody!  Hopefully, everyone had a wonderful holiday and is ready to get back to this confusing market.  The fiscal cliff has once again taken the front seat, but the technicals still call the entire ordeal as a non-event.

The state of the market in the short term, however, is still vulnerable to an overbought downswing, which could last until early January.  During this downswing, we should look to buy stocks that have been relative outperformers, which would be expected to continue outperforming into the next rally.

One stock I found, Cabot Oil & Gas (COG), fits this criteria.  The energy sector, as a whole, tends to exhibit similar behavior.  During bull markets, the sector is relatively flat until inflation starts to become a problem.  Once inflation kicks in, the sector shoots off like a rocket.  Watching bond prices, it looks like this inflationary time period is about to start.

COG, on the other hand, has outperformed the market for years, even when the energy sector was underperforming.  Therefore, in a technical position to break out in the short term, and an economic position to outperform in the long term, COG's a buy.

To see the video analysis, including price targets, entry points, and stop levels, click here.  Remember to switch to full screen HD mode for the best viewing experience!

Profile photo of DDuring college Chris (D) earned the Chartered Market Technician (CMT) designation, and is currently the youngest CMT in the world today. The CMT certifies Chris' knowledge of market timing and risk management approaches. He tends to look for broad market moves and take advantage of them with index funds. The strategy he principally uses is mostly quantitative, and, tested, and has avoided or capitalized on every major recession since the 1940s.

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