The indexes may be having trouble bursting past their all-time highs, but that doesn’t mean bulls should give up on entering new long trades.
In fact, there are still plenty of stocks out just waiting to rally – some are just in a better position to do so than others.
And they’re often located in unlikely places.
Take the tobacco sector, for example. Many of the “vice stocks” located there have been walloped over the last few months, and tobacco companies are no different in that regard.
Tobacco ETFs are down over 13% since late March, and during that fall, scores of investors gave up on the industry in Q2 2019 – a time when other stocks were flying off the handle.
But now that the dust has settled, tobacco companies may be worth another look.
Especially this one:
In the weekly candlestick chart above, you can see that Philip Morris International (NYSE: PM) is clawing its way to an uptrend.
It hasn’t been an easy year for PM bulls, but now that a sell-off has occurred following the several-month-long run up to start 2019, it could be time for share prices to head north.
A higher low has been set relative to the low of December 2018, and contact was recently made with the lower Bollinger Band (BB). Stochastics are low as well, suggesting that PM is oversold.
Better yet, the last few weekly candlesticks are trending upwards after a very bad week. As it stands, PM shares are trading at a 5-bar high and should this week close out around the current price, setting our trade trigger 0.50% above the high could make sense.
If PM keeps on rising, it’ll have plenty of room to run before hitting key resistance just shy of $93.00 – a point share prices have refused to rise above on two separate occasions.
So, before other traders realize PM’s strong positioning, it might be worth examining it on your own. But you’d better act fast.
Otherwise, you could miss a PM rush over the next month, as this trade goes “up in smoke” in a hurry.
