Zacks Investment Ideas feature highlights: LRR Energy, Advanced Emissions Solutions and EZCHIP - Press Releases

For Immediate Release

Chicago, IL- May 27, 2015 – Today, Zacks Investment Ideas feature highlights Features:LRR Energy L.P. (LRE), Advanced Emissions Solutions (ADES) and EZCHIP (EZCH).

Trigger-Happy Stock Trading

So you’ve done your research and found a great Zacks Rank #1 (Strong Buy) stock you want to buy. But now you’re stuck in that trap of analysis paralysis. It’s okay, I’ve been there before a long, long time ago. While market timing is shunned in most circles, there is a trick you can use to help you feel more confident that it’s time to pull the trigger so-to-speak.

A trigger is a mechanism you use to tell you when it’s time to enter a trade. I have experimented with various triggers including moving average crosses, parabolic SAR, MACD and a host of other indicators. What I have found is that the stochastic indicator is the most black and white trigger I can use when it comes to equity trading.

Stochastic Indicator

The mathematics behind the stochastic indicator is a bit complicated, but basically it belongs to the family of indicators known as oscillators. These indicators help traders decide if a stock is relatively overbought or oversold. It’s important to note that stocks can remain overbought or oversold for extended periods of time. Put this right up there with “Markets can stay irrational longer than you can stay solvent.”

The stochastic indicator takes this a step further and compares different timeframes of overbought/oversold calculations. This helps us see a clear trigger to enter a trade. You can read the stochastic by first determining overbought/oversold. This is as easy as reading the stochastic value.

Overbought/Oversold

Readings above 50 indicate overbought with readings above 80 as extremely overbought. Conversely, readings below 50 indicate oversold with readings below 20 as extremely oversold. Then I look for a crossover of the stochastic indicators two lines. When looking for a buy, I want a stochastic that was recently overbought and has a crossover which I call a bullish cross.

Here are three Zacks Rank #1 (Strong Buy) stocks that are showing short-term trade triggers that you can act on:

LRR Energy L.P. (LRE)

LRR Energy, L.P is engaged in operating, acquiring, exploiting and developing oil and natural gas properties in North America. Its properties are located in Texas and New Mexico and Oklahoma. LRR Energy, L.P. is based in Houston, Texas.

After trading over $20 in July 2014, LRE shares plummeted, dropping all the way down below $65 in January 2015. That bottom was retested in March and LRE since carved out a range between $6-$9. The recent retrace off the $9 high has rounded out as the stochastic indicator has dropped below 20, showing an oversold condition. It appears that the recent price action is helping the stochastics rollover, and the current bullish crossover below 20 could be the “Buy” signal that takes the stock over the $9 level for the first time this year.

Advanced Emissions Solutions (ADES)

Advanced Emissions Solutions, Inc. develops, offers and implements environmental technologies, equipment and specialty chemicals that enable coal-fueled power plants to meet emissions regulations. It operates in three principal business segments: Refined Coal, Emissions Control and CO2 capture. The company also offers dry sorbent injection systems to control SO2 and acid gases.

So far it’s been a rough year for ADES stock. Shares have come down from a December high of $23.56 to a February low down at $8.68.The retrace off the lows took the stock to just shy of the 61.8% Fib level from the high to the low at $17.88. From there the stock carved out a new bottom near $14 before rallying to retest the 61.8% level again.

Since then, shares have retreated to new relative lows but seem to have found some support from the 23.6% Fib at $12.19. This coincides with an oversold stochastic that is in the beginning of a bullish crossover. Should shares continue a bit higher, the signal will be confirmed and a move back to $16 could be in the cards.

EZCHIP (EZCH)

EZCHIP is a fabless semiconductor company that provides Ethernet network processors for networking equipment. EZchip provides its customers with solutions that scale from 1-Gigabit to 100-Gigabits per second with a common architecture and software across all products. EZchip's network processors provide the flexibility and integration that enable triple-play data, voice and video services in systems that make up the new Carrier Ethernet networks. Flexibility and integration make EZchip's solutions ideal for building systems for a wide range of applications in telecom networks, enterprise backbones and data centers.

While all three of these stocks have been beat down by a furious market, EZCH’s drop from $20 to below $15 in only one day is perhaps the most extreme move as of late. The good news is, EZCH has bounced off the lows and is currently poking its head above $16. As a result, oversold stochastics have begun to show some green shoots on the forest floor and a bullish crossover could indicate that the worst is over for this stock. Look for it to fill most of the gap down from the $20 range if the bulls get their way.

Bottom Line

Using the Zacks Rank you can search for companies that are still in the good graces of analysts even though their stock prices have been beat down. Perhaps the Zacks Rank will even help you determine the turnaround stories before they happen. By using a purely technical trigger like the stochastic indicator, you can push your fear aside and find the courage to make the move.

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LRR ENERGY LP (LRE): Free Stock Analysis Report
 
ADV EMISSIONS (ADES): Free Stock Analysis Report
 
EZCHIP SEMI LTD (EZCH): Free Stock Analysis Report
 
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