• ACI - Nov 15 201220121115
  • AGNC - Jan 24 201420140124
  • ALIAF - Mar 20 201420140320
  • ANV - Mar 05 201420140305
  • AUY - Apr 16 201420140416
  • CDE - Jun 27 201420140627
  • $CDNX - Apr 03 201420140403
  • EGO - Jul 10 201420140710
  • GDX - Jul 03 201420140703
  • GDXJ - Jun 24 201420140624
  • GLD - Jun 23 201420140623
  • $GOLD - Jun 23 201420140623
  • HL - Mar 06 201420140306
  • HMY - Mar 26 201420140326
  • KGC - Mar 06 201420140306
  • NEM - Mar 26 201420140326
  • NLY - Jul 03 201420140703
  • NSL - Oct 02 201320131002
  • PWE - May 29 201420140529
  • SIL - Mar 27 201420140327
  • $SILVER - Jun 19 201420140619
  • SLV - Jun 19 201420140619
  • TNK - Apr 23 201420140423
  • VHI - Jul 01 201420140701
  • X - Nov 11 201320131111
  • XVX.TO - Apr 03 201420140403


Long-term Trades

Long-term Trades are trade or investment ideas that have the potential for significant returns over a longer-term period, typically several months or more. This category of trade ideas might be useful for the longer-term swing trader or investor looking for investment ideas to supplement their existing portfolio and prefers a less active, more hands-off approach to investing.

Jul 102014
 
EGO stock chart

EGO Third Price Target Hit

The EGO (Eldorado Gold) Long-Term Trade idea hit the third profit target (T3) yesterday, as well as today, for a 36% gain from entry. As discussed in the mining sector video posted earlier today, the odds for a pullback in the mining stocks are quite elevated at this time and that holds true for EGO as well.

Not only are reactions off the price target levels typical in general but EGO is also coming off overbought levels (on the daily RSI) not seen since the stock peaked in Sept 2012 as highlighted on the left of this updated daily chart. I don’t expect anything remotely close to the 46% plunge in the stock that immediately followed that previous similar overbought condition, as that one had occurred during the early stages of the recent bear market in the mining sector whereas this time around, the stock is most likely in the early stages of a new bull market.

I’ve also added an very steep uptrend line on which prices current sit precariously on top of. Any solid break or daily close below that trendline would likely spark a correction which could provide another objective entry in the near future.  T5 remains the final long-term target at this time but again, the odds of at least a decent correction before EGO gets there is quite elevated at this time. Additional details on this trade, including the longer-term bullish case, can be viewed in the Gold & Silver Trade Ideas video posted on June 13th.

Click here to view the live, annotated chart of EGO.

Jul 032014
 

NLY (Annaly Capital Mgmt) is an Active Trade in the Growth & Income Trades category (descriptions of each trade category can be found at the top of their respective pages). The trade was first added back on August 19th of last year at a price of 10.68 and since then, this trade has hit some near-term profit targets where partial profit taking was suggested as well a stops being raised. There were also additional objective potential entries or add-ons posted since the original entry, not to mention a double-digit dividend yield paid out along the way (which reduces the cost basis of the trade by the amount of the dividends paid).

Such multiple entries, exits & adjustments  to position size make it extremely difficult to track the performance on some trades, particularly the Long-term trade ideas which are more conducive to trading around the target levels than the typical Long (swing) Trades. However, based on the previous entry levels and 11-15% yield on the stock since the original entry almost a year ago, NLY is still profitable although I do have my concerns about the position here. After forming some bearish divergences over the last few months, NLY has come under some selling pressure in recent trading sessions and is now approaching support as shown by the red uptrend line on this updated daily chart. Although the chart still looks constructive on the weekly time frame, any solid weekly close below the 10.50 area would hamper the longer-term bullish case for the stock. As such, longer-term traders or investor in this position might consider such a weekly close (below 10.50) as a final stop on a position. However, in order to protect profits on the current trade, NLY will be considered stopped out on a weekly close below the red uptrend line on this daily chart (currently below 10.93).

On a related note, I also have my concerns about the REIT sector in general ($DJUSRE & the IYR), which has broken below a primary uptrend line today after recently printing a divergent high (daily time frame). With NLY being a component of this sector, that is one more reason that I am tightening up the reins on this trade at this time.

click here to view the live, annotated daily chart of NLY

Jul 032014
 
GDX 60 minute July 3rd

GDX 60 minute July 3rd

The divergences pointed out last week on GDX (Gold Miners EF) have continued to build with prices making a very marginal (1/2%) new high & breaking below this uptrend line today. With the marginal new high, I had adjusted the Fibonacci retracement levels with still come in virtually right with the S3 & S4 support levels.

Regardless of the continued likelihood of a pullback to one or more of these support levels, the intermediate & longer-term outlook for gold, silver & the associated mining stocks still looks very constructive IMO. As such, I have no desire to take a counter-trend trade (i.e.-short) the miners as I still would not be surprised to see the buyers overwhelm these short-term bearish divergences and today’s uptrend line breakdown. With that being said, I also continue to hold off adding back the exposure to the sector that I recent reduced, awaiting either a pullback to one or more of these downside support targets -or- a solid & impulsive break above the recent trading range in both gold, silver & the mining stocks. Once again, longer-term traders and investors should not be overly concerned with the near-term outlook for the sector other than maybe strategically adding lots on a pre-determined scale in plan.

Jul 012014
 
VHI Valhi stock chart

VHI First Profit Target Hit

VHI (Valhi Inc) has now hit the first price target for a quick 26.4% gain in less than one week. Consider booking full or partial profits and/or raising stops if holding out for any of the additional targets.

For those new to Right Side of the Chart, multiple price targets are often used for the trade ideas to accommodate various trading styles (e.g- very active traders who prefer to book relatively shallow, quick profits & move on to the next trade; typical swing traders with holding periods measured in weeks or months; trend traders & investors who attempt to catch the bulk of a trend in a position, etc…).

Various criteria go into determining the price target levels such as significant price support/resistance levels, Fibonacci retracements, volume-at-price clusters, etc… Typically, price targets are set at level where a reaction (i.e.- pullback and/or brief consolidation period) is likely upon the initial tag of that level. Price targets (T1, T2, etc…) are usually set slightly below the actual resistance level for longs (slightly above for shorts) to help minimize the chances of missing a fill, should the position reverse just shy of support/resistance. Some traders might opt to book partial profits as certain targets are hit while very active traders might even micro-manage their trades around these levels (e.g.- reversing a trade from long to short at a target where a reaction is highly likely, then recycling back into the original direction of the trade either on the pullback or once that target level is cleared.)

Whatever your individual trading style is, the important thing is to have a trading plan in place for each trade which includes: How much capital you want to commit to the position; Whether you plan to scale into the position (average in) or take a full position upon your entry trigger; What your entry trigger will be; Your profit target(s) if the trade is successful as well as your stop level(s), if the trade does not pan out.

Jul 012014
 

As I had stated in this post last Wednesday, from the looks of the recent continued selling by the Foundation, it appears that the supply/demand equation may have reached an equilibrium point around the 5.00 level as the continued insider selling in recent sessions has been met with nearly an equal amount of buyers to soak up the supply.  With VHI (Valhi Inc) now up 36% since hitting a multi-year low of 4.98 the day before that statement was made, as well as looking at the massive volume on the steep price advance since then, I believe that the odds are now very good that VHI has seen what will likely prove to be a lasting bottom in the stock.

Continue reading »

Jun 272014
 
CDE daily June 27th

CDE daily June 27th

CDE (Coeur Mining) could offer an objective long entry on a break above the downtrend line although it may or may not need one more thrust back down inside the pattern. Although currently overbought with an RSI reading of 72.76, the stock made considerable gains after reaching that level in late 2013 following an oversold reading similar to the most recent one. If a breakout occurs soon, best to take only a partial position, adding on the next decent pullback assuming the charts still look constructive.

click here to view the live, annotated daily chart of CDE

Jun 242014
 

The first chart below is the 60 minute chart of GDX posted yesterday in which I listed my pullback targets. As GDX was still solidly entrenched in an uptrend at the time, I had placed the top of Fibonacci retracement at the top prices at that time, figuring that a near-term top wasn’t far away. As such, the key retracement levels that I am currently targeting, the 38.2% & 50% levels, came in just below horizontal support levels on that chart. Following the marginal new highs put in following today’s gap higher in GDX, I have adjusted the Fibs to reflect what I now feel more confident to be the near-term top in the gold miners that I was looking for and as you can see in the second chart below, today’s updated 60 minute GDX chart, those key Fib retracement levels of 38.25 & 50% now come in right at horizontal support levels, something that I look for to provide additional validation for a support level and/or price target. The third chart is a daily chart of GDXJ (Junior Gold Miners ETF) with some likely pullback targets, the first of which being Thursday’s gap which triggered the impulsive breakout above the primary downtrend just as with GDX, GLD, $GOLD, etc…

I wish that I could say that I had a strong preference for which support level is likely to be the final one hit, assuming of course that I’m even correct about a short-term top being put in place at this morning’s highs. I will say that I am leaning towards a pullback to the S3 level on GDX, which comes in around 24.80, but I wouldn’t be surprised to see GDX find support & go on to make new highs from any of these levels. Should GDX continue lower to find support at only the first or second support levels (S1 or S2) before moving sharply higher, that would indicate a very strong bid underneath the mining stocks and bode well for the intermediate outlook for the sector. As usually, my plan will be to gradually & systematically add back the exposure to the mining sector that I recently reduced as my profit targets were hit over the last week, focusing on the technicals of both the sectors (GDX, SIL, GDXJ, etc…), the metals (GLD, SLV, $GOLD, etc..) and of course, any specific individual mining stocks that I plan to trade or recycle back into after booking profits.