Friday, July 30, 2010

WPZ Watch

The energy company Williams Partners L.P. (WPZ) -- a big player in pipelines -- has shown up in my mailbox as an example of a prime dividend find, or so says VectorVest, the stock analysis company.
WPZ $46.89

I'll give VectorVest credit: They push real stocks as outputs of their system, not the usually speculative trash that decorates my inbox. And they're selling the analytical system, not pumping the stock, so there's a certain confidence-building detachment.

But let's backstop them, shall we?

VectorVest liked WPZ as it rose from $14.50 to $40 or so. They sold last May. So the question is whether WPZ is still a good candidate for the portfolio.

WPZ has been on an uptrend since March 2009, when the recovery began after the collapse of capitalist finance (also known as the "Karl and Fred Were Right Event"). In the nearer term, the slope has been a gentle one, but an uptrend all the same.

The quarterly dividend yield is 5.75% annualized -- OK but not super-spectacular -- and that's enough to provided some added bounce to the uptrending price.

WPZ is trading well above the 200-day exponential moving average and above the 20-day ma, so there's a lot to like in that.

On the downside, the signals are rather bearish: Both the parabolic sar and Person's Proprietary Signal have been in bear phase since Tuesday, and the macd since Wednesday. The volume has been mainly on the decline since the three-month chart peak of $48.95 set on July 23.

Also, the stock goes ex-dividend on April 4, an event that is sure to depress the price for a few days at least, and maybe a bit longer.

Person's Table
ppspps openupper pivotlower pivot
$46.78 $45.42 jul30 $48.76 +4.2% $39.01 -16.6%

On the Person's chart, the price is well above the midline, although below the upper pivot. It has room to fluctuate either way.

Reversal Levels
  • $48.95, +4.6%
  • $46.78 <== You are here.
  • $44.59, -4.7%
Bottom line: I like WPZ as a steady income play. I don't like it for entry right now, because of the capital risk of the ex-div date and the near-term bearish signals. Once the Aug. 4 ex-div date is past, then I think the stock is worth revisiting to see if VectorVest's good evaluation is confirmed on the chart.

The Great Reflation: How Investors Can Profit From the New World of Money OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we reemerge from the wreckage.

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
  • psar - Parabolic Stop and Reverse
  • adx - Average Directional Index
  • pps - Person's Proprietary Signal
  • ma20 - 20-day moving average
  • macd - Moving Average Convergence-Divergence
  • sto - Fast Stochastic
About the glance: The colors indicate the state of each signal.
  • trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
  • adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
  • psar, pps, macd: green for bull mode, red for bear
  • sto: green for overbought, red for oversold, yellow for the neutral zone.

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