By Doug Busch
A review of stock ideas can provide useful insight into what worked and where opportunities may continue to develop. This week we cover:
-- American Electric Power, introduced by Jacob Sonenshine in February. -- Precision Drilling, covered by Dan Victor in January. -- Bank of America, reported by Andrew Bary in October.
This note revisits recent stock picks where recent developments favor fresh buy or sell signals. Read last week's edition here.
American Electric Power
One of the largest regulated utilities in the country has delivered a very respectable 26% return over the past year and pays a dividend yield of close to 3%. On the ratio chart against the State Street Utilities Select Sector SPDR ETF, one can see how AEP has led the sector since the start of the fourth quarter.
The daily chart shows how the stock has risen above several well-formed bases, starting in July with a break above a double bottom. Note the bullish morning star completed at the depth of the pattern on May 15 at the 200-day simple moving average. Then a bull flag was taken out on Oct. 29 as the stock jumped 6% after a well received earnings reaction. On Feb. 12 it broke above a cup base pivot of $129.80, after its fourth consecutive positive earnings reaction. AEP has now formed another bull flag, demonstrating how industry leaders often provide a buying opportunity on the way up.
Enter now with a break above the $134 pivot, and look for a move toward $153 by year end, which would be an advance of 14% from current prices. Remain bullish above $128. American Electric Power was trading around $131 Wednesday.
Precision Drilling
The energy equipment company has also been a leader in its field, rising more than 100% over the past year. It has also led the VanEck Oil Services ETF as seen on the ratio chart.
The daily chart shows how round number theory has come into play. Last summer the stock seemed to stall near $50. During the fall, it repeated the exercise at the $60 mark. In December, a bull flag formed at the $70 level, starting just as the 200-day simple moving average began to slope higher. This is a good indication that the long term secular trend is firming. A couple months prior, I admired how a bullish golden cross occurred as the 50-day simple moving average crossed above the 200-day SMA.
Another bull flag has just formed around the $90 number, shrugging off the ugly bearish engulfing candle from Feb. 12. Volume was strong last week as the stock added 3%, showing relative strength during a period when the VanEck Oil Services declined by 6%.
Enter here and look for the stock to travel toward $110 later in the second half of the year, which would be a 20% gain from current prices. Remain bullish above $85. Precision Drilling was trading around $91 Wednesday.
Bank of America
The financial conglomerate is down 11% in 2026, but it's hardly alone. The State Street Financial Select Sector SPDR ETF is the worst-performing major S&P group year to date, down almost 9%. The ETF is now down 16% from its most recent 52-week high and has declined seven of the last 10 weeks.
The daily chart has shown some absolute strength against peers, with BAC acting well on the ratio chart over the past year. The stock has this year showed a tendency to close at or near lows of its weekly range and it is now trading below its 200-day simple moving average. But the last three sessions have produced some bottoming candles, including two doji candles and a spinning top on March 10. This is a good risk reward scenario to enter here as a double bottom base is potentially setting up. One can add to above the potential double bottom pivot of $56.97 that was created following the completion of a bearish evening star on Feb. 10.
Look for the stock to travel toward $70 by year end, corresponding to a gain of 43% from current prices. Remain bullish above $46. Bank of America was trading around $48 Wednesday.
The broader message remains the same. Strong setups can still reward patient investors.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 11, 2026 23:06 ET (03:06 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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