This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.

Welcome to our sixth part of our series on Systematic Trading!

In this part, you’ll discover two stocks that are beating the US stock market. Furthermore, these stocks are exciting as they are fresh breakouts. 

Before you scroll further, you’ll want to check out our stock pick in Feb on Apple and True

Are you excited and all ready to jump in?

 

CenterPoint Energy (NYSE: CNP)

Source: centerpointenergy.com

1. About the Company 

Energy. The lifeblood of our economy. 

It’s one thing that we consume all the time and cannot live without. Energy is needed for our meals, transportation, work, entertainment, to keep us cool etc.

CNP supplies natural gas to homes and businesses, provides maintenance works on electric infrastructure, provides heating and cooling solutions and much more. 

This means that CNP’s share price is correlated with the price of energy. 

What does the chart of CNP look like?

 

2. Position Trading (Daily)

Do you see a green arrow below the latest candlestick? 

The green arrow indicates that a new uptrend has likely arrived. 

There’s an indicator in the form of bars at the bottom of the chart. The latest bar of the Trend Impulse Factor is dark green, indicating that the momentum of CNP is strong. 

Combining the readings of both indicators, you can see that CNP is ripe for a position trade. 

In addition, the price of CNP had been ranging for three months before this breakout. It’s something I like as it suggests that there’s a long runway ahead. 

 

CSX Corporation (NASDAQ: CSX)

Source: csx.com

1. About the Company 

In Singapore, our railways are used to transport its residents. However this isn’t the case in many other countries where railways are used to transport livestock and goods as well. 

CSX has a market capitalization of $82b. This makes it the third largest railway company by market capitalization in the world. Here’s a map of its railroads across the US.

Source: soundingmaps.com

From the map above, you can tell that railways are critical to transporting livestock and goods from the coastal region to the inner landlocked places.

Therefore, railway companies such as CSX play an important role in the economy. 

Shall we have a look at its chart?

 

2. Position Trading (Daily)

Similar to CNP, there’s a green arrow below the latest candlestick of CSX. This means that a new uptrend is likely to have arrived for CSX. 

Next, the latest bar of the Trend Impulse Factor is dark green, indicating strength. 

Thus, CSX is ripe for a position trade!

Lastly, the price of CSX ranged for slightly more than a month before the breakout. Isn’t the price action of CNP and CSX eerily similar?  

 

Conclusion

While the prices of CNP and CSX are rising, they could drop should the economic climate or market sentiment change. Hence, it’d be wise to have a stop loss to protect your trading capital. Doing so will allow you to trade for another day. 

Buying stocks on the breakout without a proper system can be highly risky. This is why TradersGPS (TGPS) was created. The indicators will help you decipher if a stock is a cut above its peers. You won’t have to feel in the dark and make wild guesses.

What are your thoughts? Which stock would you buy?  

Share your thoughts with us below!

 

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