February 24

Diamondback Energy: #PowerStocks Series Pick Of The Week (February 2024)

15 days of the Lunar New have flashed by.

How many Lohei have you had?

Lohei is a Chinese practice that brings people (usually loved ones and business partners) together for a toss of food.

It’s the only time one can be forgiven for “playing” with food while shouting phrases of auspicious words.

With the festive season over, let’s review last week’s stock pick of the week: Ecolab (Ecolab).

Review Of Last Week’s Pick Of The Week

The share price of Ecolab (ECL) pulled back to the top range of its gap at $214 before rising.

I’d expected a deeper pullback to the region of $207.

However, I’m heartened that the share price of Ecolab has risen along with the S&P 500. This proves that the market participants are still optimistic about its shares.

If you’ve applied The Art of Explosive Profits framework on the shares of Ecolab, you’d be up by more than 2%.

Now that we have reviewed last week’s stock pick, let’s analyze this week’s stock pick, Diamondback Energy (FANG).

Why Is Swing Trading Diamondback Energy (FANG) Worth It?

Diamondback Energy logo

Source: diamondbackenergy.com

Diamondback Energy (FANG), this week’s #PowerStocks pick, acquires, develops, explores, and exploits unconventional, onshore oil, and gas reserves.

As the need for energy continues to grow, it’s unsurprising that its share price is rising explosively.

Each upmove measures between 4.6% and 22.6%, and this is an incredible feat for a company with a market capitalization of more than $31b!

In addition, the share price of Diamondback Energy is pulling back and could reach its support area soon, readying for a swing trading opportunity.

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Performance Of US Stock Market vs Diamondback Energy (FANG)

Comparison of S&P 500 and Diamondback Energy

What can you tell from the performance chart of the S&P 500 and Diamondback Energy’s shares?

Both the S&P 500 and the share price of Diamondback Energy are in a clear uptrend.

While the S&P 500 has been a better performer till mid-Feb 24, it wasn’t long before Diamondback Energy’s shares soared to outperform the overall stock market.

With such bullish momentum, its share price will likely continue rising, making it a fantastic candidate for a swing trade.

Therefore, you’ll want to analyze this stock further.

How Explosive Is Diamondback Energy (FANG)?

Diamondback Energy Explosive Up Moves

How much has the share price of Diamondback Energy increased recently?

It’s essential to have a realistic expectation of its performance.

Diamondback Energy’s shares have been rising steadily since Apr 23. Its share price has exploded anywhere from 4.6% to 22.6%.

In the latest up move, its shares flew a whopping 22.6%!

Diamondback Energy enjoys a massive market capitalization of over $31b, so these explosive movements are impressive.

Additionally, it’s safer to swing trade its shares compared to stocks with a smaller market capitalization.

Key Price Levels

Diamondback Energy Key Price Levels

Diamondback Energy’s shares have proven to be explosive.

Is it time to buy its shares for a swing trade?

Let’s uncover its immediate key price level to watch. This key price level is also known as a support and resistance zone.

Zooming back to late 22, you can uncover a support area of ~$167 that isn’t obvious at 1st sight.

Knowing that the share price of Diamondback Energy had recently soared 22.6%, you can expect a pullback. And its share price will likely pull back to ~$167 before bouncing higher.

Therefore, I’m eagerly waiting for its share price to drop to ~$167 before considering buying its shares for a swing trade.

Finally, this is for educational purposes. Please perform your due diligence.

All images are taken from pexels.com, pixabay.com, sectorspdrs.com, tradingview.com, and unsplash.com, unless otherwise mentioned.

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Worse still, ~80% of traders lose money.

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