EOG Resources – Energy Outperformer Ready To Rally 35%

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By Chris Diodato

"A stock is never too high to go higher, nor too low to go lower."  That's a quote from one of my favorite books,Reminiscences of a Stock Operator,as the main character was explaining his reasoning for buying stocks as they reach new highs.  This will be one of those "buy high, sell higher" type of trades.

EOG resources has been a market leader in the energy sector as of late.  Below is a ratio chart of the energy sector ETF, XLE, divided by price of EOG.

http://i48.tinypic.com/opbkeg.png

As you can see, the line is clearly declining, which means that EOG is outperforming.  This trend actually started in October of 2011, when EOG mustered enough strength to become a market leader.

So what's the trade Chris?  Take a look at this video to find out!  Included are more technical signals, the risk management plan, and the target!

 

Happy trading!

~Chris Diodato

Metrotrader (D) is one of the few practicing CMTs (Chartered Market Technicians) in the United States . The CMT certifies his 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. He says the best way to make money is to avoid losing it in the first place.

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