$YPF – ADD WATCH: Needs Lower Volume and Less Volatility as it Approaches Channel Support


Technically this looks like a great setup. The fundamentals show recent growth and acceleration, but this is and ADR so their financials seem incomplete. It’s interesting that recently Goldman Sachs gave this a sell with a price target of $5.80. From the price action, that doesn’t seem the case. Nevertheless, I should use caution.

The price seems a little too volatile still, but the contractions are getting smaller. Also, it’s pretty close to hitting the channel support, which has initiated bounces in the past.

Stage Analysis

It’s about 6 months into a well-defined Stage 2.

Stage 2 Criteria

Bullish market trendYES
Sector RS outperforming marketYES, Energy is 28.46% above SPX
2x average volume on BO from Stage 1 or leading up to itYES
30-week MA risingYES
Price above 30-week MAYES
Overhead supply over past 2 yearsNO
Outperforming SPXYES
Length of previous Stage 12.4 Years

Base Count

The first base looks like a base on base. The initial VCP BO, but then failed and fell back into the first base. From there, it made a base reset and BOP successfully the second time. After a 54.78% gain from that BO it’s setting up a second base now.

Base Structure

Identifiable base on weekly and dailyYES
Prior up-trend of at least 30%YES, 54.78%
Length of base
    At least 5 weeks flat base
    At least 9 weeks ascending base
    At least 7 weeks for all other bases
31 days
Contain elements of strength:
    Daily gap ups on volume
    RS at new high
    Tight price ranges
    KO Recoveries
RS is at a new high at end of base, KO Recovery at beginning of base
Contain elements of support:
    Support weeks
    Base on top of base
    Price above 40-week MA
Prior base was a BOB, up weeks have been on big volume and price above 40-week
Shakeout near low of baseYES, 3


VCP needs a little more time to settle down. Contractions need to tighten just a bit more and volume needs to come down. The base is also about to intersect with the channel support. If low volume and contraction match with that, then its more evidence. There still seems to be a bit much OH supply above PoLR.

VCP Criteria

Decreasing volatility from left to rightYES, but needs less
2 – 6 contractions (typically 2 – 4)YES, 2 but needs another under 10%
Each contraction is roughly 1/2 the previousNO, 17% and 12%
Deepest contraction < 50%YES, 16.86%
On right side tight price ranges from high to low of rangeYES, but needs to be tighter
On right side lowest volume in baseNO, needs to be lower
Rising RS as emerging from baseYES, RS at high



Past 2 quarters EPS growth >= 25%Last Q was, but no info on the Q before
Past 2 quarters margin growth >=25%Last Q was less, but Q before was big
EPS growth >= 25% in past 3 – 5 yearsLatest Q was but not previous Q’s data is limited due to ADR
EPS surprisesYES
EPS break outYES
Annual ROE >= 17%NO
Earnings driftYES, good ED after latest Q
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