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Thursday, August 18, 2016

Chart Analysis in an Overbought Market (TGT, T, FLO, TRV) - Part 2

This is part 2 of a 2 part post (part 1 here) about the current state of the markets. I am not going into any length to describe the factors playing into the market, but instead I want to look at individual stock charts to paint the picture for us.

The first part discussed some stock charts that look like they are extremely overbought. This second part will focus on stocks that still look reasonably valued. Again, this will be purely based on the stock chart analysis.


 Stock 1 -TGT

 
According to the FAST graph, it appears TGT is not overvalued right now. I know Target JUST missed earnings estimates yesterday, and they have a lot going on in the news in regard to their grocery business, online sales, bathrooms, etc... which do need to be taken into account. Based on the chart alone, the stock has retreated nicely back to a reasonable premium compared to earnings. TGT is a dividend champion with increased dividends for 49 years!


Stock 2 -T


AT&T has a choppy chart, let's be honest. However, in the chart above, it has not traded at a premium to earnings since 2001. It is sitting right on the orange line above, but earnings forecasts are looking good so it appears to be properly valued right now. Great dividend yield right now as well! AT&T is a dividend champion as well with 32 years of increased dividends.


Stock 3 -FLO


 
Another example is Flowers Foods. To be transparent, I did just purchase FLO and TGT this week (post here). Why did I buy them? Because there charts look good to me. FLO has traded just above earnings as far back as this chart goes. Earnings have been flat lately, but the price has now come back down to a level that matches the earnings and therefore looks attractive. It is a dividend contender at 15 years of increasing dividends as well.


Stock 4 -TRV



Travelers Insurance has a solid looking chart with a slow and steady stock increase since 2004.  I wouldn't call it an exciting stock, but its consistent and has not seen a huge run up in stock price in the latest bull market. It is a dividend contender with 12 straight years of dividend increases.

Conclusion

Even in this over extended bull market, there are some stocks out there that are not trading at extreme premiums. There are certainly stocks out there that are trading for cheap, but they have very valid reasons for it. Others have news scares or other one time events that persuade the stock price. In any case, you need to do your research before buying anything. The charts above are just one tool to analyze stocks.

 Did I miss any stocks that YOU think are a good buy at currently trading prices? Let me know what you think in the comments below. I would love to hear your thoughts!


Note: I am not an affiliate of FAST Graphs so I will not make any money from this article from FAST Graphs. I just find them very useful and am a regular subscriber.


Long FLO, TGT

Disclaimer: I am not a licensed investment professional. I am not liable for any losses suffered by any parties. Any information on this site is my opinion only and should not be used for investments of any kind.

12 comments:

  1. Thanks for sharing! I'm not a FASTgraphs expert, but I prefer to buy when the price line is in the dark green area. That seems to be a favorable entry point to me.

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    1. Hi FerdiS, In general I agree with you. That is the prime time to buy for most stocks, but certain stocks like FLO usually trades at a premium and it might never reach that dark green area. So you could avoid the stock all together but you could also make a profit by looking at the bigger picture. Thanks for the comment!

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  2. Love these types of posts and the fastgraphs is an added bonus. Thanks for sharing.

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    1. Hi Captain! Glad you enjoy it. I wish I had more time to put into posts like this but its hard to find the time with toddlers running around :) Thanks for stopping by!

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  3. I think VAR is a steal at curent prices. CNI, BF.B and APH have some potential as well. Could you write a post about them?

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    1. Thanks for the names. I have heard of CNI before, but not the others. I will check them out! Thanks for the comment.

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  4. Thanks again! Great to see that two of my recent purchases are on this list (TGT and FLO)!

    -TDM

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    1. Hi TDM! I think next weeks summary will show quite a few TGT and FLO from around the community. Especially with that drop in TGT after earnings. Anyway, thanks for the comment and reading!

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  5. Hi Adam. I love Fast Graphs. It's a go to for me before I ever buy stock. I bought Flo earlier this week and sold a few TGT options. So we're both in agreement on thee two stocks.

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    1. Glad to hear it IH! Looks like from my summary this week that many others are in agreement as well :) Thanks for the comment!

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  6. If enough of us buy Flo it will shoot t up to 100 a share right???? Lol

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