On Tuesday, I explained that the energy sector is in the driver’s seat for earnings and revenue growth this year.
For the first quarter, the energy sector far surpassed all other sectors in terms of year-over-year earnings growth, coming in at 257.8% year-over-year.
It’s the same story for revenue growth as well.
With energy prices on the rise, as you can see in the daily chart of crude oil futures (CL) below, energy companies have been making more earnings and revenue.
Add in the fact that most other sectors are under heavy selling pressure, and it’s no wonder why energy stock prices are rising.
These tailwinds helped to push up the price of one stock in particular that I’ve been telling you about lately.
And today I want to cover exactly how we booked a 21% gain in the shares in just over two weeks…
Crude Craze
Before we get to that, however, we need to look at the crude oil futures (CL) market.
This past Tuesday, it looked like the CL market was getting ready to break out to the upside.
The market traded nearly up to the $120 per barrel level but then gave back all of those gains into the close.
On Wednesday, the CL made another, weaker attempt to break above resistance only to end in the red once again.
And while this wasn’t exactly a clean break of short-term resistance, the bullish move did give my Alpha Stocks subscribers the opportunity to close the remaining portion of our Permian Basin Royalty Trust (PBT) position for a very nice gain.
Permian Basin Breakout
Now, with the energy backdrop in mind, let’s go over the step-by-step process of how we took profits in PBT stock.
I’ve drawn out our entry and exit points on the chart below so you can follow along easily…
I recommended the position on May 17 as the stock was pushing up against its horizontal resistance level around $14 per share.
After a few days, we got the breakout we were expecting, which took the stock up to the $16 level on May 20.
With that move, we closed the first portion of our PBT trade at $15.57.
The stock held steady and even rose slightly over the following three days, so we took profits in the second portion of the trade on May 25 at $17.20.
At this point, we also raised our stop on the final piece of the trade to $15.60 to make sure we’d book a gain even if the stock dropped.
Finally, think back to Wednesday’s action in CL… That small push in crude oil pushed PBT higher by another 2% or so early in the day.
And that allowed us to close the third and final portion of the PBT trade at $18.52 before it pulled back a bit on Thursday.
Put those all together, and Alpha Stocks members were in and out of the PBT position with an average gain of over 21% in just 15 days!
Congratulations on a great trade!
Join Me This Afternoon
If you took this trade as a Stock Surge Daily reader, I recommend closing any remaining positions in PBT if you haven’t done so already.
Now, to receive alerts any time I have a new recommendation or profit-taking opportunity, consider signing up for my Alpha Stocks research service.
As you can see, we have plenty of long ideas for the right stocks, but we’re also not afraid to go short.
In fact, we recently recorded a huge winning trade on the downside in only eight days as Pegasystems Inc. (PEGA) stock plunged last month…
We short stocks and we also provide option alternatives if that’s more of your style.
And we get together every Monday for an hour-long live session so that subscribers can ask questions and get guidance about our trades.
If you’re ready to see what you could be missing out on, you’re in luck!
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
