Monday, October 31, 2016

Anyone Else Feeling Gassy?

Kinder Morgan Inc.   [KDI]

Today oil & gas and utilities were bumping. I was checking out the finviz map and they were lit up bright green. 


LEFT: Oil and Gas refining.

RIGHT: Electric Utilites

(for reference)

Hope all of you had a good weekend and are having a good Monday. I have been real busy which is why this will probably be published near 6.
     Kinder Morgan deals mostly in natural gas so the pictures above don't have a ton to do with the company, but they kinda relate. Let me get into why I'm liking this particular company. So right off the bat and what got me initially interested in KDI is this headline I saw on finviz looking at top insider trading. 
Fayez Sarofim is an original shareholder of Kinder Morgan as well as the second largest shareholder. Last week he went and bought almost $15 million dollars worth of KMI stock. I'm no analyst, but that seems pretty bullish to me. That works out to a purchase of 700,000 shares at $21.41. You could look at this purchase as a way to get his cost basis down or you could look at it as a bullish look at the company. I choose the latter over the former because of who I am as a person. So besides that let's take a look at some charts.

If you've been picking up on what I have been talking about with charts then you may know where I'm going with this. Curveball, I'm going to start somewhere else. Recently I have been doing some more research on moving averages and how to read those and what some indicators mean. Let me take the next 30 seconds of you time and tell you a thing or two I learned. The Golden Cross: It's a bullish indicator for when the 50 day MA crosses above the 200 day MA. Typically a very bullish pattern. What I also noticed is that when a shorter term moving average crossed above a longer term one it was usually a bullish indicator, though not as strong as the golden cross. 
     If we look above, the 15 crossed over the 50 at the end of August and when that happened we did see an increase in the price of the stock, small as it was. If we look closer (may be tugging at strings) the 50 day MA is starting to flatten out and could create an opportunity for the stock to create a solid base to increase from.      

*So I'm pretty sure all the moving average explanations are right, but take it with a grain of salt. I just want to provide my opinions on the stock for the few readers who research it further and see for themselves if I was right. So once again...just my opinions and remember this blog is titled the Uninformed Investor.*  

     Back to what I'm more comfortable talking about; the MACD and the stochastic. Obviously right now isn't the ideal time. There was a bearish crossover in the MACD and the stochastic hasn't shown a true signal as to whether it will bounce of the red line and continue down or cross and move it's way back up. Another thing to note is that KMI has been in a fairly strong channel upward and at this current moment is near it's support line.

     I feel like I may have contradicted myself a little bit during this writeup so let me try and clear it up if I did. Right now, I wouldn't buy this stock. Personally, I am going to keep checking in and see if it starts to appear more bullish, if the indicators I look at start to seem better for me. If I do start to see some changes, I will make edits on this blog and tweet it out. 

As always thanks for reading and please leave some feedback. I'd really like to see what some of you think.

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