APA trade ideas
APA Corporation buys on the simulator at the breakout of the tarBuy entry at 29.60 for APA Corporation, first target at 31.48, second at 32.64, and final target at 33.98.
APA Nuzzles Lows as Headwinds Afflict EnergyAPA is struggling, even as the broader market powers to new highs.
The first pattern on today’s chart is the 2023 low of $30.67. The oil and gas driller has spent much of this year near and below that old level. It’s also made incrementally lower lows. That may suggest support is breaking.
Second, the 50-day simple moving average (SMA) had a “death cross” under the 200-day SMA in December. The 100-day SMA followed in January. Now the 50-day SMA has crossed back under the 100-day SMA. Those events may confirm a bearish trend is forming over the longer term.
Third, this chart includes our 2 MA Ratio custom script in the lower study. It shows the 8-day exponential moving average (EMA) has spent almost two months below the 21-day EMA. That may suggest the shorter-term trend has also gotten more bearish.
Finally, the bigger picture may be less favorable as demand weakens and inventories increase – especially for gasoline. TradeStation data also shows that energy is the worst-performing sector in the last month.
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Stocks pairs trading: APA vs TROWLet's examine the trade potential for APA Corporation (APA) and T. Rowe Price (TROW) by analyzing their key financial metrics and recent performance to determine reasons for going long on APA and short on TROW.
Price-to-Earnings (P/E) Ratio:
APA: P/E ratio of 3.29
TROW: P/E ratio of 14.03
APA's significantly lower P/E ratio indicates it is trading at a cheaper valuation relative to its earnings compared to TROW. This could suggest that APA is undervalued and has more room for price appreciation.
Forward P/E Ratio:
APA: Forward P/E of 6.11
TROW: Forward P/E of 13.51
APA's forward P/E is also lower than TROW’s, reinforcing the idea that APA might be more attractively valued based on future earnings expectations.
Return on Equity (ROE):
APA: ROE of 179.94%
TROW: ROE of 20.09%
APA's exceptionally high ROE indicates effective management in generating profits from equity, which is a positive sign for potential investors.
Strategic Acquisitions and Financial Performance:
APA recently completed its acquisition of Callon Petroleum, which is expected to enhance its operational footprint and synergies in the Permian Basin. This move follows a series of strategic acquisitions by major energy players, highlighting APA's proactive approach to growth.
Dividend and Analyst Outlook:
APA declared a regular dividend, maintaining a yield of over 3%, which is attractive for income-focused investors. Additionally, analysts have set a price target of $41.90, suggesting a significant upside from its current price around $29.36.
Decision:
Long on 4 APA:
Short on 1 TROW:
APA - Bullish My bias for the bigger picture (monthly) is bearish, however there is opportunity at these areas to take some profits to the upside, and sell before price reaches major resistance areas.
This trade might take a couple of months to play out.
Not financial advice.
APA - Wave 3 Ahead?Standing out recently for not participating along with other oil stocks moving higher, APA has the potential to triple should the wave 3 unfold as illustrated. I've been building a position at this level.
APA Ready to MoveWhile the price of oil and other oil stocks have been on the move higher, APA has dignificantly lagged. Wave count indicates that the correction is over and higher prices ahead. Wave 3 projection shows prices exceeding 100 at 1.618% reading.
#APA# Energy dynamics will boost share prices.APA Corp. engages in oil and natural gas exploration through its subsidiary companies. The company operates in the United States, Egypt, and the United Kingdom, with offshore exploration activities in Suriname. Established in 1954, APA Corp. is headquartered in Houston, Texas.
The primary rationale for recommending this stock lies in the current tense geopolitical situation, which has led to an increase in energy demand. As we approach the year-end, the energy sector is emerging as a clear choice for investors. Geopolitical tensions in the Middle East have directly contributed to a resurgence in oil prices. Additionally, gloomy macroeconomic prospects have intensified concerns about global demand. Furthermore, the United States has tightened sanctions on Russian crude oil exports (link), exacerbating the already strained market supply concerns. Global inventories are expected to decline in the fourth quarter, which is likely to drive energy prices even higher, benefiting a range of related companies.
From a financial perspective, APA Corp.'s Q2 2023 financial statements show an improvement in net income compared to Q1. The company's previous quarter's earnings were $0.85 per share, exceeding the estimated $0.75 per share, representing a 13.53% surprise. Although the estimated figure for Q3 is $1.74 billion USD, the company's revenue for the same period is $1.96 billion USD. The next quarter's estimated earnings are $1.19 per share, with anticipated revenue reaching $2.01 billion USD, indicating a stable financial performance. This stability aligns with the core investment philosophy of maintaining a steady course towards the end of the year, leveraging the trends resulting from the geopolitical landscape, much like the benefits accrued during the previous AI boom.
Furthermore, APA Corp. has been recognized by FORTUNE magazine as one of the World’s Most Admired Companies for a fifth time, ranking fifth among international energy exploration companies, a testament to its operational excellence and reputation in the industry.
From a technical standpoint, APA Corp. is currently positioned at the breakout point of a descending wedge. On the daily chart, the RSI indicator has hit a bottom and is showing clear signs of a reversal pattern. In the MACD indicator, the $39 level marks a golden cross price point, while the Alligator indicator is beginning to contract upwards, signifying that the previous downtrend is nearing its end. The Fibonacci retracement at the 38.2% level offers significant support, and the stock is currently at the short-term resistance of 78.6%. The optimal entry point is around $40, which is also the key support level at 61.80%. The short-term first target is $55.53, with the second target at $85.40, and the third target in the vicinity of $95.12.
Trading Recommendations:
Entry Price: $34 to $44
T1: $55.53
T2: $85.40
T3: $95.12
Stop Loss: $30.70
Possible long positionIf the estimates are correct regarding the earnings as of 01. Nov. we could see a breakout from key levels and the wedges forming on APA. This is purely based on earnings and technical analysis and the possible recession might change the outcome. I will be monitoring this stock closely and looking out for key levels in 41, 45, 49 and 51 dollars.
APA established new positionWaited until Jerome Powell had finished speaking before taking any trades today,
Started the day with a new position on APA.
The ong entry trade set up is as follows:
1. Directional indicator are moving in opposite directions at an angle (pref > 35 degrees)
2. Volume osciallator (Chakin money flow and On Balance) is increasing
3. Resistance based on higher timeframe. In this case I have set potential resistance at slightly above $35
(Note that this is a projection only and does not necessarily mean that the price is expected to test resistance)
APA long. Looks prime for another move up. 3:1 risk reward herEasy Risk reward here. 3:1 I like the wave count and targets with easy stop .
Hedged Options Strategy on APAOil is one of the few sectors that analysts are still bullish on in 2023. Long arguments include catalysts such as China's re-opening, airlines recovering, and lowered supply leading to higher oil prices. APA Corporation, formerly known as Apache, operates in the US, Egypt and the UK and is one of the largest American explorers for oil and gas properties. It owns entire lines of production from gathering to transport with four pipelines running from the Permian to the Gulf Coast, as well as 2.3 billion barrels of oil reserves. Positive earnings reports exceeded expectations, and with a recent drop in stock price, this could be a good time to enter. Dividend stocks are popular in bearish times, and APA pays a consistent one, though not the highest at ~2.3%.
Elliot Wave traders will also note where APA is going in the pattern, though yesterday's doom-and-gloom market might make investors think twice about jumping in. For downside protection, this hedged options strategy could make up to 9% (17% annualized) in ~7 months while cushioning against a fall of up to 31% (to below $29.85) as of 7/21/23.
Buy 1 $42.50 call
Sell 1 $45 call
Sell 1 $30 put
7/21/23
Capital Required: $2985
APA - Long OpportunitiesTechnical Analysis:
- Price cross 20 MA and above, and is above 200 MA
- Stock is on an uptrend, with 20MA > 50 MA > 200 MA
- Price has been consolidating horizontally and the last bar was a strong rejection of the bearish bar before that (Oil and gas sector fell sharply on the day before)
- Volatility is high
- Stock seems to be in the early uptrend stage
Fundamental Analysis:
- APA is 97.3% undervalued based on discounted cash flow analysis
- Stable quality earnings growth of more than 500% over the past year
- Debt is well covered by operating cash flow
I have placed a buy stop at 47.5 for the next trading day.
APA - 1D - LongAPA is making HH and HL on a 1D time frame. We can see a weekly trendline and monthly resistance are giving tough times, which is a real challenge for now. If we combine the head and Should pattern + bullish divergence on RSI + Dow theory then it may cross this resistance soon then the target would be around 60.
APA - Rising MegaphoneA Megaphone structure with more bullish increases yet to come as indicated by the bars pattern
A megaphone like this could also be referred as a rising expanding wedge , but megaphone is the correct terminology
Bullish on this Monthly timeframe
US Stock In Play: $APA$APA - Energy | Oil & Gas
energy sector leads in RS over a 4wk period.
$APA outperformed among the S&P500 names from yesterday's market selloff with a double bottom price pattern from its correction in a 2-years uptrend. BO lvl coincides with confluence of VWAP & KMAs at $37.50
APA: rounding bottom pattern?It will appear that a rounding bottom pattern is busy developing (see the insert as well as the blue arrowed line on the chart).
The price action is also fairly close to the lower range of the linear regression channel pattern.
This increases the likelihood of some upside price potential.
Also testing its 200-day simple moving average.
MACDMACD is a tool that is used to detect moving averages that are showing a new trend, whether that trend is bullish or bearish. This indicator can be used to identify moving averages that are signalling a new trend. In 7 July 2022, the MACD line is crosses from below to above the signal line. This condition is considered as bullish. The futher below the zero line is the stronger signal. The difference between the MACD Line and the Signal Line is graphically represented by the Histogram. This is a graphical depiction of the distance that separates the two lines. According to this chart, which shows the histogram increasing in size when the two moving averages (the MACD and Signal lines) separate on 7 July 2022, may be seen here. This phenomenon is referred to as a MACD divergence because the more rapid moving average (the MACD Line) is "diverging" from the more gradual moving average, or moving in the opposite direction (Signal Line). If we see in 13 July 2022 ,the histogram is start smaller or disappear in its size as the moving averages approach closer proximity to one another. This phenomenon is referred regarded as convergence due to the fact that the faster moving average (MACD Line) is "converging" or approaching the slower moving average (Signal Line). This means the price of stock will decrease that indicate a downtrend which is a selling signal. As in 13 July 2022, the MACD is not cross the Signal line yet either cross above or below, we cant predict the movement of the trend either uptrend or downtrend. But the histrogram showed its getting smaller and look to disappear. So, we take the decision to predict the price would decrease which indicate bearish sign. We enter the market as trading sell at the price of 32.92. Set the target price at 31.20 and stop loss at 35.02.
RSIIn the month July 2022, It moves downward and above the horizontal reference level of 30, this is a bulish sign and indicate buying signal. RSI rises over the horizontal 30 reference which is the value is 36.46. This means RSI is a positive indication and indicate bullish sign. A sign of a rising trend is when there is a movement from below the centerline (50) to above it. When the RSI value moves above the 50 line on the scale and towards the 70 line, this demonstrates what is known as a rising centerline crossover. This is interpreted as a bullish signal until the Relative Strength Index (RSI) gets closer to the level of 70 because it shows that the market trend is getting stronger. As investor, we enter the market as trading buy at the price of 32.92. The target price is set above the enter market which is 35.02 and the stop loss set below the current price which is 31.20.
ROCA zero line that distinguishes between positive and negative values is shown against the ROC. Positive values indicate upward momentum or purchasing pressure, whereas negative values below zero indicate downward momentum or selling pressure. The value of ROC is negative at 13 July 2022 and indicate selling pressure. As investor, we trade the market as trading sell. With the entry price at 32.92, While set the target price 30.70 at and stop loss price at 35.38.
$APA with a Bearish outlook following its earnings #Stocks The PEAD projected a Bearish outlook for $APA after a Negative Under reaction following its earnings release placing the stock in drift D with an expected accuracy of 83.33%.
BOLLINGER BANDJohn Bollinger invented the Bollinger Bands, which are a sort of price envelope. Bollinger bands help determine whether prices are high or low on a relative basis. They are used in pairs, both upper and lower bands and in conjunction with a moving average. Bollinger Bands are price envelopes drawn at a standard deviation level above and below the price's simple moving average. The bands respond to volatility fluctuations in the underlying price because their distance is based on standard deviation. Bollinger bands are used to evaluate if prices are relatively high or low. They're employed in pairs, with upper and lower bands, and with a moving average in between. The indicator's main line is a simple moving average (SMA). This charting software defaults to a 20-period chart, which is sufficient for the majority of traders. At 7/6/2022, the price reached the top at the band at 51.91. After that, As can be seen, the price has settled back into the middle of the bands. Then at 21/6/2022, the price break the Lower band. This information help me add context to trends and potentially determine when they might be overextended and reverse. When it does, probability theory assumes the security price is likely to revert back to a moving average, or mean, between the upper and lower bands. This is called mean reversion and this is use as trading decision for me. Then I set a Entry/ Buy price at 39.89, Target Profit near the middle at 43.13 and Stop Loss Below the Lower Band which are 35.76.
