Warren BuffettWarren Buffet Favorite Occidental Petroleum Leads 5 Stocks to Watch Near Buy Points
western oil (OXY) leads your stocks to watch for the week ahead. egg producer Cal Maine Foods (CALMS), Big BJ Club (BJ) and Hershey (HSY) increase food prices. Ultimate beauty (ULTA) is recovering after several failed attempts in the past. All stocks are either in the basics or near key support levels.
The market moved into a confirmed uptrend as major indices rose sharply during the week amid a huge flurry of earnings, economic data and a sharp Fed rate hike. While the market is on the mend, investors should still add cautious exposure.
Western Oil Stock
Occidental Petroleum is holding up better than most of its energy peers. This is partly due to OXY stock’s status as the personal favorite of investment guru Warren Buffett. His Berkshire Hathaway (BRKB) increased its stake to almost 20% in the company.
The rebound in energy prices is also helping.
OXY stock is in phase 2 of consolidation. It is currently trading above its moving averages after making big jumps above its 10-day line and 50-day line on Friday.
MarketSmith is showing an official buy point of 74.14. But a push above OXY stock’s July 26 intraday high at 66.05 could offer early entry from the 50-day line.
But beware: Occidental Petroleum publishes its results on Tuesday. This makes buying OXY stock before that very risky.
Analysts predict Occidental’s earnings will soar 846% to $3.03 per share and revenue will rise 63% to $9.77 billion.
Oil and natural gas giant Occidental Petroleum is striving to achieve net zero emissions through its investments in carbon management. OXY stock has a perfect composite rating of 99 and an EPS rating of 77.
Carbon Capture in the Oil Industry: Production, Net Zero, ESG
Cal Maine Stock
Cal-Maine is the largest egg supplier in the United States, especially to the Southeast. CALM stock reversed lower this week, finding support slightly above the 50-day and 10-week moving averages. On a weekly chart, CALM stock now has a handle. The base buy point for the mug with handle is 57.85 on the weekly chart. The handle needs one more day to seed on a daily chart.
Cal-Maine’s fourth-quarter results in mid-July beat Wall Street expectations. CALM’s earnings jumped to $2.25 a share from a loss of 9 cents a year earlier. And revenue soared 70% to $593 million, the fourth straight quarter of accelerating growth.
Earlier this week, Cal-Maine’s relative strength line reached a new high, indicating that it is outpacing the broader market. CALM stock has a composite rating of 98 and an EPS rating of 77.
Hershey, IBD’s stock of the day for Thursday, posted strong results on the day, with sales growth accelerating for a second straight quarter. HSY stock nearly broke on Friday when it was already within range of an aggressive entry.
HSY stock is in a flat base with an official entry of 231.69. But it broke through resistance just above 222 on Thursday, then added gains on Friday.
HSY stock has a composite rating of 97 and an RS rating of 93. Hershey is on an earnings growth streak and has an EPS rating of 90.
Last Tuesday’s IBD stock of the day, BJ’s Wholesale Club is also a stock to watch for the week ahead. BJ’s is outpacing its retail peers as its food and gasoline sales offset cuts in consumer spending.
BJ stock has a double bottom buy point of 71.10. Stocks climbed from their lows in late May to the buying point in July, flirting with a breakout a few times but then pulling back.
Its support found around the 21-day moving average, essentially forming a handle.
One issue is that BJ stock’s advance from the lows has generally occurred on light volume, a problem for many potential leaders in recent weeks.
The double bottom base is a fourth floor design. Third-stage bases or later are considered late-stage bases, which carry more risk than earlier-stage bases.
BJ’s publishes its results on August 8. The wholesaler has posted five consecutive quarters of sales growth and has posted an average profit surprise of 20.8% over the past two years. BJ stock has a composite rating of 97 and an EPS rating of 95. Its RS rating is 93.
Ulta Beauty is one of the few beauty stocks that performs well. It has posted five straight quarters of profit and revenue growth. But ULTA stock fell 3% on Friday to 388.91, dropping below its 50-day line. Stocks are hanging just below their 200-day line where they found support last week.
ULTA stock has been trending sideways for nearly a year amid a series of failures. It is currently in a flat base with a buy point of 429.58. But investors looking for an earlier entry point could use 417.08, just above the July 22 ULTA peak.
ULTA has a composite rating of 96 and an EPS rating of 90.
You can follow Harrison Miller for more stock info and updates on Twitter. @IBD_Harrison
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