The stock market appears to be back on track, with more investment and trading ideas becoming available. Case in point: several stocks recently crossed their 50-point RSI or Relative Strength Index line and moved into bullish territory. The RSI measures the strength of a security’s price change and momentum on a scale of 0-100. Securities crossing above their midpoint or 50-point mark are considered bullish. Trading stocks with RSI's over 50 gives investors a hint as to the direction of the stock and allows us to capitalize before a breakout.
We've got you covered if you need help figuring out where to start. Here are three stocks currently in bullish territory that are ripe for the picking.
Teekay Tankers Ltd. (TNK)
Teekay Tankers Ltd. is a marine transportation provider for the oil sector that owns and operates crude oil and product tankers. Its operations offer operation services for various vessels under contract with the Australian Government and deliver all constituent support. This includes maintenance, vessel operations, engineering support, training, and other support services. Its fleets include eight time-chartered-in tankers and forty-four double-hull tankers.
TNK’s latest quarterly release demonstrated its strong financials with a 19.56% YoY GAAP net income growth and total liquidity of $511.5 million. On top of that, it reiterated its commitment to provide shareholder value through its last announced dividend of $0.25 per share.
Should you buy TNK?
TNK recently broke out from its resistance zone after a solid move towards the bullish 14-day RSI midpoint. Short-term 20-day SMA and medium-term 50-day SMA also flashed a bullish crossover signal that helped push prices upward with the influx of trader buying. Traders and investors interested in buying TNK can either wait for prices to establish strong support or for the SMAs and prices to catch and propel prices upward.
HealthEquity, Inc. (HQY)
HealthEquity, Inc. is a tech company that helps consumers save on healthcare and other spending decisions. HQY uses technology to help its consumers manage consumer-directed benefits (CDBs) and health savings accounts (HSAs) from their employers. The company also offers members a mutual fund investment platform and advisory service.
HealthEquity’s recently published outlook anticipates an 8.75% full-year increase in HSAs by the end of January 2024, reflecting a growth of 10.86% YoY. HQY also announced that they expect their total accounts to increase by 4.7% and highlighted a 40% capacity increase with high-rated insurance partners.
Get ready for a potential breakout.
Price actions show HQY’s growing strength. After its quick test and rejection of its near-term resistance area, traders stepped in, and prices broke through the same area. With additional bullish momentum, we might be on the verge of retesting its 2023 high at $76.62. The 14-day RSI also shows a healthy upward trend supported by average volume. 20-day (red line) and 50-day (yellow line) SMA are starting to converge, suggesting we might see a bullish crossover soon. Traders and investors looking to buy into HQY can either wait for prices to break out and settle above the resistance area or for SMAs to catch up and provide additional signals.
DHT Holdings, Inc. (DHT)
DHT Holdings, Inc. is a crude oil tanker company with a fleet of very large crude carriers (VLCC) operating in Singapore, Norway, India, and Monaco. Besides its crude oil tanker business, DHT offers technical management services. Its fleet comprises 17 vessels in the spot market and six time-charter ones. Its latest financials highlighted the company's strong performance with a 20.4% YoY revenue increase, an 89.3% adjusted EBITDA growth, and a 313.3% surge in net profit.
Is an SMA crossover signal on the way?
DHT’s price action is slowing down after the solid upward move to $10.99. Prices show signs of a potential triangle pattern on the intraday chart, while daily price action shows a possible crossover of its 20-day and 50-day SMAs. The 14-day RSI also shows momentum moving on an upward-sloping channel. Investors and traders interested in making a short-term pick on this DHT can monitor its intraday price action for potential continuation patterns or wait for the price to set up a strong base on its near-term support, near $10.50. It’s best to employ stricter risk management if you plan to trade this idea in the short-term.
Final Thoughts
RSI is one of the best tools for locating bullish stocks gaining momentum for potential continuation trades. However, investors and traders should still remember to conduct their due diligence and proper risk management, as RSI is not a one-size-fits-all indicator.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
