3 Commodity Stocks to Buy on the Dip: Rio Tinto, Weatherford, and Williams Companies

By Commodity HQ  SEP 18, 2013 12:17 PM

These three stocks boast market caps that are upward of $10 billion, have average daily volumes topping $1 million, and are trading above their 200-day moving averages.

 


Domestic equities have managed to return to their bullish ways as easing concerns over US military involvement in Syria have helped some of the uncertainty that’s been plaguing investors’ confidence on Wall Street. Furthermore, investors rejoiced after Larry Summers withdrew his bid for Fed chairman earlier this week, showcasing the market’s concerns over the abandonment of “ultra loose” monetary policy.

Amid the ongoing rally on the home front, bargain shoppers are in search of trending stocks at attractive levels. As such, below we take a look at three big commodity stocks that are trending higher, but have slipped in the last few trading sessions, thereby offering an attractive opportunity to “buy on the dip” in the near future.

The stocks included here are rated as “buy” candidates for three reasons: First and foremost, each of these companies boasts a market cap upwards of $10 billion along with average daily trading volumes topping the $1 million mark, in an effort to weed out smaller, more volatile, trading prospects; second, these securities are trading above their 200-day moving averages, thereby implying they are in longer-term uptrends; thirdly, these stocks are also trading below their 5-day moving averages, which makes them attractive for swing traders looking to buy in before they rebound. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.

Rio Tinto (NYSE:RIO)

Consider RIO’s one-year daily performance chart below.


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This stock appears to be reversing its bear trend which has persisted since the start of the year; notice how RIO has been able to break its trend of lower-highs (red line) and has been climbing higher along a rising support line. Furthermore, it’s encouraging to see this stock attract above-average buying volumes as it peered above its 200-day moving average (yellow line) last week.

Weatherford International (NYSE:WFT)

Consider WFT’s one-year daily performance chart below.


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This stock has been trading  in a tight, well-defined channel (blue lines) since it settled backed above its 200-day SMA (yellow line) at the start of April this year. With WFT currently trading near the lower support boundary, entering into a long position is attractive for two reasons: First, traders can closely manage downside risk by setting a tight stop loss near recent lows; second, there is favorable upside potential here given WFT’s well-defined uptrend at hand.

Williams Companies (NYSE:WMB)

Consider WMD’s one-year daily performance chart below.


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This stock appears to be regaining bullish momentum as it recently settled back above its 200-day moving average (yellow line). Shares of WMB have been climbing along rising support (red line) and have also managed to attract above-average buying volumes above support at the $35 level.

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Editor's note: This article by Stoyan Bojinov was originally published on Commodity HQ
No positions in stocks mentioned.