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.
Completed Trades are trade ideas that have hit one or more of their price targets. Many trade ideas will list multiple targets as some traders might choose to hold some or all of the position for an additional target(s) after the initial target is hit. Therefore, many trade ideas on this site will often appear in both the “Active” and “Completed” categories simultaneously. Trades are removed from the Active Trades Category either upon hitting the final target or if stopped out before then. Once removed from the Active Trades category, these trades and all associated posts will be archived indefinitely in the Completed Trades category for future reference.
The JO (iPath DJ UBS Coffee ETF) has hit the final target (T2 @ 22.92) for a 10.7% gain. Consider booking full profits and/or raising stops for those who plan to hold as a long-term trade. The previous & updated 60 minute charts as well as the weekly charts of $COFFEE (spot coffee prices) below illustrate how using multiple time-frames can be used successfully to “catch a falling knife” as this trade was entered less than 2% from the bottom of a vicious bear market that chopped off about 2/3rd of the value of spot coffee prices.
Although it is still too early to declare with confidence that the bear market in coffee prices is over and that this is anything but a counter-trend bounce, the recent price & volume action as well as other bullish technicals highlighted on the $COFFEE weekly chart do help support such a case. As stated in the original post on Nov 6th, the JO trade (as well as coffee futures for those preferring a pure play on coffee prices) still has the potential to morph into a longer-term swing or trend trade. As previously stated, the 2nd target on the JO trade based off the 60 minute time frame was my final target for this trade and as such, the JO trade will now be moved to the Completed Trades category. However, JO (and $COFFEE) will remain as Trade Setups in both the Long (typical swing trades) and Long-Term Trade categories.
Those who are longer-term bullish on coffee prices may therefore decide to hold some or all of their position here while raising stops to protect profits. The next buy signal for both JO and/or coffee futures remains on a solid break or weekly close above the weekly falling wedge pattern on $COFFEE. Waiting for prices to print a weekly close above the downtrend line helps to minimize the chances of chasing a false breakout but could also lead to a less-than-optimal entry should prices explode higher during the week following a breakout. Therefore, each trader must decide whether to take an intra-week breakout or wait for a weekly close above a resistance level/buy-point when trading off the weekly charts. Something that I will look for if taking a breakout of a weekly chart during the week would be for a breakout on above average volume (at least 1.5x the average volume for the last 60-90 days) as well as any other bullish price action, such as a bullish reversal candlestick pattern on the daily frame.
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)
In updating the trade ideas today, the following stocks will be removed from the Active Trades category to the Completed Trades category in order to focus on the most attractive opportunities at this time. Many of these trades have already hit a profit target or remain profitable at this time while a few are slightly underwater at this time.
HOV- Although this trade is still profitable and may very well continue lower to hit one or both of its price targets, HOV has been locked in a frustrating trading range ever since the entry earlier this year. In order to focus on more promising trade ideas, HOV will be removed from the Active Trades category.
JPM- JPM is currently trading around 5.25% above the original entry which came on a break below the 14-month uptrend line back in mid-August. Just over a month later, on Sept 25th, JPM hit a low 50.06 vs. the first price target of 50.04. From there the stock bounced to recently make a marginal new high while putting in even more powerful negative divergences in place so as with so most other recent short trades, this one may very well go on to hit the second and final target of 46.58.
KBH- This home builder stock hit its first profit target about a month after the short entry was triggered back in late June and has since floundered around in a relatively tight trading range around that level, still profitable at this time. Like most other short trades being removed today, KBH very well may break down from the current trading range and move lower to hit the second and final target but will be removed in order to focus on trades with a more favorable R/R at this time.
KEX- KEX moved lower after entry but reversed about a point above its first target and has been backtesting the broken uptrend line from below since.
KO- KO is another short trade that is still profitable and continues to looks promising longer-term for those who wish to remain short. The short entry for KO was triggered on a break below the steep ascending channel on the daily chart back in late May. KO went on to drop about 13% from there, so far reversing just shy of the first target but is still profitable by nearly 7%.
LEN- As with the HOV & KBH trades mentioned above, LEN is another home builder stock which has already hit it’s first profit target and remains solidly profitable at this time. Two separate short entries were posted on LEN, giving the trade an average entry price of 38.22. LEN is current at about an 8% profit from that level after making it down about half-way to the 2nd target for a nearly 20% gain before reversing. As with the other home builders, LEN has chopped around in a trading range around the first target level for months now. As with the other builders, I believe that the additional target levels will likely be hit over time but I am removing LEN from the Active Trade category in order to focus on trade currently offering clearly bearish technical patterns and better R/R profiles.
M- M (Macy’s) was most recently covered in the Nov 7th Short Trades Update video in which I mentioned a typo that I made on the final price target. M quickly hit the first profit target after the entry earlier this year and continue to fall reversing exactly on my final target line, however due to mix-up, I had incorrectly listed that target as 42.08 on the chart when it should have been about 15-20 cents higher. (The stock reverse at 42.18 and never looked back).
PWRD- PWRD hit the first profit target shortly after entry and still remains profitable. However, the stock has recently experienced some very volatile, sloppy price action which has muddled the charts somewhat. As such, PWRD will be moved to the Complete Trades category at this time.
SBH- This trade is essentially flat, trading less than 3% above the original entry price. Basically, the stock has chopped around in a frustrating trading range for what seems like forever and with out a clear read on the chart, SBH will be removed from the Active Trades category for a slight loss.
UNP- UNP was shorted at 156.00 in Sept and is currently trading at 160.72 or about 3% higher. As the technical picture is now somewhat obscure, UNP will be considered stopped out for a small loss and moved to the Completed Trades category.
The remaining Active Short Trades look fine at this time and updates will continue to be posted as important technical developments occur (targets hit, breaks above/below support/resistance, trendline backtests, etc…) As always, feel free to contact me if you any questions about these or any other trade ideas posted on the site. Also keep in mind that many of the trade ideas now have links to the live, annotated charts which are updated regularly, sometimes without a new post & static chart. The live chart links (for trades that have one) can be found under the most recent posts by selecting the ticker symbol from the “Posts By Ticker Symbol” drop-down menu on the right sidebar of the home page. This would be the preferred method when following a trade (vs. bookmarking the live chart link) as the link address to the live charts are occasionally changed or updated.
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 LL (Lumber Liquidators Holdings) short trade has hit the first target of 91.25 for a gain of 18.2%. T2 at 71.72 remains my current final & preferred target although this trade may still be extended to the 49 area, should the trend indicators on the broad market start to roll over soon. Updated daily chart shown. Click here to view the live, annotated chart.
Admin note: A feature will soon be added to Right Side of the Chart allowing those subscribed to receive email notifications of new posts to select which specific categories they wish to receive email notifications on. For example, long-term swing traders and investors might choose to only receive notifications when a new Long-term Trade setup is posted while opting out of receiving notifications of completed trades, market analysis, etc… This new feature is expected to be rolled out within the next week.
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.
The HSOL (Hanwha SolarOne Co) has hit the second & final target of 2.68 for a gain of 40.6% from entry (or more if shorted on the recently highlighted backtest). Consider booking full profits as the R/R no longer warrants remaining short at this level.
Although short trades remain counter-trend trades with the broad market solidly entrenched in an uptrend, HSOL (along the other recent short trades in the solar sector) is a good example of how technical analysis can be used to help identify profitable trading opportunities long or short, regardless of the overall trend. Updated daily chart shown below preceded by the previous daily charts for a quick visual history on the trade.
CLD (Cloud Peak Energy), one of the recent coal stock trades, has hit the top of the target zone for a 14.7% gain & will be considered completed. For those who wish to hold out for additional gains, the yellow downtrend line would be the next likely target. Previous & updated daily charts below. Click here to view the live chart of CLD.
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!