These Energy Stocks Hold Up Near Buy Points Amid Market Declines; Mosaic Fights Off Sell Zone

With energy stocks outperforming in recent weeks, a small handful of firms held up near buy zones despite ongoing market weakness. Elsewhere, chemicals company Mosaic (MOS) struggled to escape the 7% to 8% sell zone from a recent breakout.

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Tampa-based Mosaic, an agricultural fertilizer manufacturer, broke out in heavy volume on Jan. 12. However, this week's market declines hindered the breakout, and shares faded from a 41.25 entry of a cup-with-handle base. On Friday, the stock undercut its 21-day line, but managed to hold above the 7% to 8% sell zone, according to MarketSmith chart analysis.

But Mosaic did trigger a sell rule from a higher cup-base entry at 43.34, which can be seen on the weekly chart. While the breakout from the 41.25 entry is still in play, investors should watch carefully as the market volatility poses added risk. Shares fell as much as 9.5% this week.

With its 99 Composite Rating, it's safe to say Mosaic is a leading stock in a leading industry group. The agricultural chemicals group ranks No. 12 out of 196. With expected EPS growth of 495% in 2021 and 48% the year after, Mosaic is indeed a growth stock with strong fundamentals. The firm is set to report upcoming Q4 earnings on Feb. 16.

Energy Stocks Actionable Now

Two noteworthy energy stocks scored breakouts earlier this week and remain actionable now. Those include coal producer Alliance Resource Partners (ARLP) and oil and gas firm Diamondback Energy (FANG).

Fellow oil producer Viper Energy Partners (VNOM) also broke out and hit new highs this week, but faded from its proper entry on Friday. Both Diamondback and Viper Energy are part of the oil and gas exploration and production industry group, which ranks No. 5 for six-month relative price performance among the 197 groups IBD tracks.

Shares of Diamondback remain inside the buy zone from a 117.81 entry. Shares became extended last week but pulled back to test support at the 21-day line on Friday. Diamondback averaged year-over-year EPS growth of 686% over the past two quarters. Additionally, the RS line remains near recent highs.

Viper Energy also pulled back to test its 21-day line. Shares broke out on Jan. 6 and hit new highs this week. The stock is struggling to hold above a new buy point at 25.42. Viper began forming the current cup base in October. Shares in this leader among energy stocks feature multiple weeks of heavy volume gains and an RS line nearing highs.

Alliance Resource Partners, the second-largest coal producer in the eastern U.S., dropped 7.7% this week after hitting new highs. The stock's most recent breakout from a cup buy point of 13 remains in play. But shares reentered the buy zone this week after becoming more than 15% extended.