RNO (Rhino Resource Partners) has hit the first target in less than one trading session for an 11% gain. Consider booking partial or full profits, depending on your trading plan. T2 remains my preferred and final target at this time.
Active Trades are trade ideas that were previously posted as Trade Setups and have since triggered an entry or occasionally, a trade idea that was first posted directly to the active trades category as offering an objective entry at the time of the initial post. Active Trades might also be listed in one or more of the other trade categories as these categories are not necessarily mutually exclusive. E.g.- An Active Trade that still offers an objective entry might also be categorized under the Trade Setups category. Likewise, an Active Trade with multiple prices targets may have already hit one or more of those initial targets with additional target(s) remaining, thereby falling under both the Active Trades and Completed Categories. Traders should look to make any new entries or add to existing Active Trades objectively, such as a on pullback to a support level during an uptrend or a re-test of a broken trend-line, wedge, or channel pattern.
The RNO Long Trade Setup posted last week has triggered an entry on a break above the descending channel. I also wanted to point out that going forward, many of the static charts will list both the suggested target level as well as the actually resistance (for longs) or support (for shorts) level. TC2000 just added a new feature to the latest beta version update which will automatically add the exact price level of a horizontal line. As many of the price targets that I use are based off horizontal support or resistance levels, I find this to be a very useful feature. As I have often stated, my suggested target levels (T1, T2, etc…) for long trades are typically set slightly below the actually resistance level in order to help assure a fill as a stock will occasionally reverse just shy of resistance, especially well watched levels.
(note: Although the previous post correctly referred to the pattern as a descending channel, the previous 60 minute chart posted below incorrectly listed the channel as a wedge pattern. However, the net effect of the breakout is essentially the same… i.e.- a breakout & likely trend reversal)
GCAP (GAIN Capital Holdings Inc.) will be added as an AGGRESSIVE long entry here around 7.13 as the stock has plummeted over 50% to key uptrend line support (daily chart) while also at horizontal support with bullish divergences in place on the 2-hour chart. GCAP successfully hit the final target for a 25.3% gain early this year on the previously long trade, with the stock going on to make a parabolic run which terminated a few months ago, followed by a very powerful reversion to the mean (i.e.- the primary uptrend line where GCAP is currently trading). As overshoots of support are always a possibility when a stock is in a very powerful downtrend, I plan to keep my stop very tight on this trade (slightly below 7.00). This gives the trade an exceptional R/R (about 20 cents downside to nearly 2.00 profit potential or nearly a 10:1 R/R). However, I would also put the probability of being stopped out above average as this is one of the proverbial “trying to catch a falling knife” trades. One alternative and slightly less aggressive entry would be to wait for a break above the minor downtrend line which defines that small bullish falling wedge pattern on the 2-hour chart below.
YZC (Yanzhou Coal Mining C0) has pulled back to support & could provide an objective long entry or add-on. Consider a stop below the 9.10 area (or higher, based on your average cost). YZC was added as a Long Setup on Oct 21 with a buy trigger for only a partial position on a move over 10.75 (bringing to a full position if & when the downtrend line is cleared). The stock triggered an entry on Nov 21 but reversed a few days later and has now fallen to a key support level. Although one could add to an existing partial position here or establish a new entry, with a stop not far below, my preference is to hold off on adding any long exposure at this point as both the $RUT & XLK (and likely some other key sectors or indices) have broken those key uptrend lines highlighted earlier today. Also keep in mind that KOL (the coal sector ETF) still remains below key resistance. The updated daily chart of YZC (adjusted for dividends) shown or click here to view the live chart of YZC.
RNO (Rhino Resource Partners) will trigger a long entry on a break above the descending price channel as shown on this 60 minute chart. RNO was a recent Growth & Income Long-term Trade that was stopped out on a weekly close below the larger falling wedge pattern shown on the 2-day period chart below. All posts associated with that trade have been moved to the Completed Trades category and RNO will now be added back as a new long setup (a swing trade most likely lasting anywhere from 1 day to a few weeks) with an entry to be triggered on a breakout of the 60 minute descending channel (complete with bullish divergences in place). Stops TBD upon entry.
Regardless of the recent sharp sell-off in this high-yielding coal stock, RNO may still offer an objective longer-term swing trade entry if prices break above this steep descending channel and then manage to move back above the base of that larger falling wedge pattern. The volume surge on the recent break below the bottom of the wedge may indicate a selling climax as well as a bear-trap, should prices move back well above the larger pattern in the upcoming days/weeks. If so, an entry based off this shorter-term pattern could potentially morph into a longer-term trade with additional price targets to be added but for now we’ll just have see if we get some decent technical evidence of a potential trend reversal in the stock.
The day before Thanksgiving, an update was made to the NLY (Annaly Capital Mgmt Inc) Growth & Income Trade. As the stock was poised to likely print a second consecutive weekly close below the 10.50ish weekly support (the initial suggested stop criteria), I wanted to highlight some potentially bullish developments on the charts before I left town for the holiday for those who might want to give their position a little more room. Since then, the stock did go on to break above the highlighted downtrend line, make a successful backtest and has begun to move impulsively higher over the last couple of trading sessions. In addition to the price breakout, we also now have the confirmed bullish crossover on the MACD that I was looking for as confirmation to the positive divergence that was forming on the MACD.
Therefore, NLY still remains an active Growth & Income Trade idea and with a current dividend yield of approximately 14% in addition to a 20% price appreciation if the current (revised) 2nd price target is hit, this mREIT looks to offer a very attractive R/R as a long-term swing trade opportunity with a stop below the 9.65 area (or higher, based on one’s average cost and trading style). For simplicity, I have updated the price targets to reflect an entry or add-on based on the most recent post.
NLY was originally posted as a long entry at a price 0f 10.68 back on Aug 19th and went on to gap above the 2nd price target of 12.12 for a 14.7% gain (at which point it was suggested to book partial profits and/or raise stops). This most recent move below that key long-term support level could very well prove to be a final stage flush out move providing a lasting base from which to launch a more sustain, healthy advance in NLY. Maybe, maybe not so make sure to set stops commensurate with your own risk tolerance/trading style if you already own or decide to take this trade. I continue to prefer a scale-in strategy with most of the Growth & Income and commodity related trade ideas as these are bottoming plays. Previous & updated daily charts shown below. Click here to view the live, annotated daily chart of NLY.
For those still long NLY or considering a position in the stock, NLY (Annaly Capital Mgmt Inc) is once again trading below the 10.50ish weekly support level after closing below that level last week. In the previous update, it was mentioned that one, especially two weekly closes below support would be bearish for the stock and that may very well prove to be the case. However, from the bullish perspective, NLY is forming some potentially strong positive divergences as shown on the daily chart below. In addition, the stock appears to be forming a hammer candlestick on the weekly chart (although things could change before the weekly stick is finalized at the close of trading on Friday). Hammer candlesticks often form at the end of an extended downtrend and can signal a reversal in a stock. Again, how we close the week is what matters when using weekly candlesticks in your analysis. Additionally, a hammer would need to be followed by one or more bullish candlesticks in order to help confirm a potential reversal in the stock. As such, NLY will remain an Active Long Trade for now. If the stock holds up, a break above the steep downtrend line on the daily chart below could also signal an objective long entry or add-on. There are several other trade ideas that need to be updated but I will be traveling today and out of town for the remainder of the week. As such, I will not be able to post any additional trade ideas, market commentary or updates until I return later this weekend or first thing Monday. For those that celebrate it, have happy and safe Thanksgiving holiday!
The YZC (Yanzhou Coal Mining Co) long trade setups has triggered an entry today on a break above 10.75. Next entry or add-on will come on a break above the downtrend line which is also the first price target. Updated daily chart:
New market commentary & trade ideas/updates continue to be light as there hasn’t been any significant developments to report in the broad market (other than a flurry of additional bearish topping candlesticks over the last few days). I have come across several new trade ideas this week which I plan to cull through in order to add those with most attractive R/R (risk to reward) potential & highest probability of playing out
The ANR (Alpha Natural Resources) Active Long Trade has formed a bullish pennant continuation pattern around the T2 area. An upside break will likely be the catalyst for a move towards the next target level. NOTE: A new price target (T3) at has been added at 8.97 with the previous 3rd & final target now T4. Price targets are added to levels where the odds for a reaction (pullback and/or consolidation) are likely. Shorter-term traders might prefer to book partial or full profits at one of the earlier targets while longer-term traders might prefer to hold out for the higher price targets. Very active traders might use the various target levels to micro-manage their trades (e.g.- reverse from long to short as a target is hit, thereby booking profits on the long trade and going short for a quick pullback trade, assuming that the charts confirm a pullback is likely). Updated daily chart: