There are several approaches that investors can use when finding new stock ideas. One of the most popular is technical analysis, which involves looking at the charts and using various indicators to determine if the stock is a buy candidate. What makes the market efficient is that one investor may view a chart as a buy signal and another as a sell signal.
Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

I came across four stocks during my daily search through interesting charts and will explain why each stock is flashing a buy signal.

OYO Geospace Corporation (Nasdaq:OYOG) manufactures instruments that are used in the process of acquiring seismic data. This process can be used in the monitoring and execution of oil and gas wells. The company is also involved in niche sectors such as marine cable, earthquake detection and textile markets. Technically the stock rallied to a new all-time high in February 2012 on heavy volume before pulling back and consolidating during the last couple of weeks. The stock has support between $100 and $103, and as long as it can hold above that level it will remain in a bullish pattern. Fundamentally OYOG is also attractive with a PEG ratio of 0.46, suggesting higher prices in the future. For related reading, see Interpreting Support And Resistance Zones.

Berry Petroleum Company (NYSE:BRY) is an independent oil and natural gas company that has the majority of its wells west of Colorado. Fundamentally the stock caught my eye with a PEG ratio of 0.33, making it more attractive than many of its peers. The 0.6% dividend yield is not a decision changer. Technically the stock broke out to a multi-month high in February before pulling back to support at the $48 area. The volume has been bullish and the stock is now considered oversold. From a macro view, the increased emphasis on oil production in the United States will also play an important role in pushing BRY and the rest of the sector higher.

Kennametal (NYSE:KMT) supplies tooling and engineering products for the production process to companies worldwide in a number of different industries. The products are used in everything from mining for metals to agriculture to the defense sector. Technically KMT broke to a new high above $46 earlier in March and has since been consolidating near the breakout level. That consolidation combined with bullish volume has generated a buy signal for the stock. To back up the chart is a PEG ratio of 0.81, a dividend yield of 1.3% and the positioning in a hot sector.

Royal Gold (Nasdaq:RGLD) is not your typical gold stock; instead of owning the mines and being involved in the extraction process, RGLD owns royalty interests in various mining projects around the globe. As of Aug. 30, 2011 the company had interests in 184 properties on six continents. The short-term chart on RGLD is not as positive as the first three, however the long-term chart is extremely bullish. The stock has pulled back to double-bottom patterns and is near support at the $60 area. A buying opportunity exists as long as RGLD can continue to close above support.

The Bottom Line
It is important to remember that if you are buying for a short-term trade that the fundamentals will likely not make a difference. But, if you are buying a stock to hold for a longer period of time, the fundamentals are crucial as well as the technical analysis. For additional reading, check out 5 Must-Have Metrics For Value Investors.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
At the time of writing, Matthew McCall did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  2. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  3. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  4. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  5. Stock Analysis

    Tech Stocks Vs. Financial Stocks in 2016

    Consider the arguments for allocating more of your investment portfolio to either the technology sector or the financial sector for 2016.
  6. Stock Analysis

    The Top 5 Financial Penny Stocks for 2016 (CPSS, ASRV)

    Learn about some of the most promising penny stocks in the financial services sector that investors can consider adding to their portfolio for 2016.
  7. Investing News

    Chipotle Served with Criminal Probe

    Chipotle's beat muted expectations and got a clear bill from the CDC, but it now appears that an investigation into its E.coli breakout has expanded.
  8. Stock Analysis

    Analyzing Sprint Corp's Return on Equity (ROE) (S)

    Learn about Sprint's return on equity. Find out why its ROE is negative and how asset turnover and financial leverage impact ROE relative to Sprint's peers.
  9. Stock Analysis

    Why Alphabet is the Best of the 'FANGs' for 2016

    Alphabet just impressed the street, but is it the best FANG stock?
  10. Investing News

    A 2016 Outlook: What January 2009 Can Teach Us

    January 2009 and January 2016 were similar from an investment standpoint, but from a forward-looking perspective, they were very different.
RELATED FAQS
  1. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  2. How can insurance companies find out about DUIs and DWIs?

    An insurance company can find out about driving under the influence (DUI) or driving while intoxicated (DWI) charges against ... Read Full Answer >>
  3. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  4. Point and Figure Charting Using Count Analysis

    Count analysis is a means of interpreting point and figure charts to measure vertical price movements. Technical analysts ... Read Full Answer >>
  5. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  6. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center