• ACI - Nov 15 201220121115
  • AEM - Jul 30 201420140730
  • AGNC - Jan 24 201420140124
  • ALIAF - Mar 20 201420140320
  • ANV - Mar 05 201420140305
  • AU - Jul 30 201420140730
  • AUQ - Jul 30 201420140730
  • AUY - Apr 16 201420140416
  • CDE - Jun 27 201420140627
  • $CDNX - Apr 03 201420140403
  • CORN - Jul 28 201420140728
  • EGO - Jul 30 201420140730
  • GDX - Jul 03 201420140703
  • GDXJ - Jun 24 201420140624
  • GFI - Jul 30 201420140730
  • GG - Jul 30 201420140730
  • GLD - Jun 23 201420140623
  • $GOLD - Jul 30 201420140730
  • HL - Jul 30 201420140730
  • HMY - Jul 30 201420140730
  • IAG - Jul 30 201420140730
  • KGC - Jul 30 201420140730
  • NEM - Jul 30 201420140730
  • NLY - Jul 03 201420140703
  • NSL - Oct 02 201320131002
  • PAAS - Jul 30 201420140730
  • PWE - May 29 201420140529
  • SIL - Mar 27 201420140327
  • $SILV ER - Jul 31 201420140731
  • $SILVER - Jun 19 201420140619
  • SLV - Jul 31 201420140731
  • SLW - Jul 30 201420140730
  • SSRI - Jul 30 201420140730
  • 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 312014
 
SLV 120 minute chart

SLV 120 minute chart

As a follow-up to the previous 120-minute chart on GLD, this is the 120-minute chart of SLV (Silver ETF) showing two key support levels, the first of which is not far below current levels. The S1 & S2 support levels (1st & 2nd support) are defined by the large gap from June 19th as well as several previous reaction lows & high on the silver ETF. Although I had not drawn the similar uptrend line on the previous posted 120-minute GLD chart as is shown on this 120-minute SLV chart, GLD did also recently experience a breakdown (and backtest) of a similar uptrend line also following a divergent high & extreme near-term overbought conditions. (I also pointed out that comparable uptrend line break on the 60 minute GDX chart towards the end of yesterday’s video).

Those breakdowns, especially following the divergent highs & overbought conditions, were unarguably bearish technical events and as such, prices have moved lower since. With that, I’d imagine that bearish sentiment on the metals & miners ramped up considerable in the last few days in addition to a flurry of selling (by both longs & shorts) in GLD, SLV & the miners.

If a new cyclical bull market in gold & silver is indeed underway, then my expectation would be to see this current downtrend in the metals & miners reverse at or quite possibly before the lower support levels shown on these 120-minute charts. Should GLD & SLV reverse shy of those support levels and relatively quickly go on to take out the recent July 10th reaction highs, I would view that as very bullish price action, with the next & final key resistance area (which would trigger a powerful longer-term buy signal) being the March 13th & Feb 24th highs in GLD & SLV (respectively).

Jul 302014
 

The following video covers spot gold prices as well as the gold mining sector including some of my top picks as potential long-term trade/investment ideas. As this video is quite lengthy, a brief summary of the items covered can be found in this order:

  • About the first 6 minutes discusses the big picture on spot gold prices ($GOLD) with some comments on the mining sector as well.
  • Starting at the 6:25 mark, I begin covering the daily & weekly charts of some of the most promising long-term trade candidates in the gold & silver mining sector in the following order: AU, NEM, HL, KGC, IAG, HMY, SSRI, SLW, GG, EGO, PAAS, AEM, AUQ, GOLD, & GFI (note: A couple of these names I discuss the charts but I am not currently very bullish on).
  • Starting at the 33:00 minute mark, I cover the 60 minute chart & near-term outlook of GDX. (total video time 36:40 minutes).

The bottom is that the miners remain in the consolidation range they’ve been in for the last month as do gold & silver prices. Most likely, the miners are waiting for a resolution of the trading range in the metals (i.e.- a confirmed and sustained upside or downside move out of the recent trading range). $GOLD is also precariously close to its long-term secular bull market uptrend line. Therefore, I am watching closely for the possibility of another successful test of that uptrend line although a sustained breakdown below that level would be a bearish technical event that could bring prices down to re-test the mid & late 2013 double-bottom lows. My overall bias in gold, silver & the miners from a long-term perspective remains to the upside for now although I am still not confident enough in the near-term direction to aggressive start adding back the exposure that reduced in my trading account last month. Maybe soon, quite possibly very soon just not yet. In my longer-term accounts I continue to hold exposure to the gold & silver mining sector, allowing for relatively wide stops at this time.

 

Jul 282014
 

CORN (Corn ETF) offers a somewhat aggressive entry here on the break above this 60 minute bullish falling wedge pattern. CORN will also offer a second objective entry or add-on to an existing position taken here if & when prices move solidly (5 cents+) above the top of the July 21st gap (26.67). I refer to this current entry as somewhat aggressive for two reasons: First, that July 21st sizable gap is not too far overhead. Gaps, particularly large gaps, often act as support & resistance, especially on the initial tests of those gaps following their creation. Therefore, taking a long-side breakout in relatively close proximity to resistance may limit the upside potential on this trade, should prices ultimately fail to surmount the 26.67 level.

The other reason that an entry here is somewhat aggressive is due to the fact that CORN might go on to backtest this 60 minute falling wedge at lower levels. As the weekly chart below highlights, $CORN (spot corn price) has been in a very powerful downtrend (actually, a third reason this is an aggressive entry) and is currently trading in what I call No-man’s Land, which is when a stock is trading in an area well above & well below any decent support and resistance levels. When trading these “catch a falling knife” trades, where a stock is in free-fall mode yet I believe a powerful trend reversal is imminent, I prefer the stock to be approaching a key support level on the weekly chart while setting up in a bullish chart formation on the daily and/or intraday charts. In the case of $CORN, the next solid support level (340ish) is about 8% below current levels.

With that being said, I still see enough potential for a possible trend reversal from current levels to initiate a starter position in CORN (CORN ETF). An ideal scenario in the upcoming days would be a gap above the top of the July 21st gap (26.67), to put in place an Island Cluster Reversal bottom, with the “island cluster” being the group of candlesticks that were formed over the last week or so. That would be a very bullish technical event & one in which I would bring CORN to a fully position. As of now, my plan is to establish a partial position on the breakout of this 60 minute falling wedge, adding if and only if price move above the top of that July 21st gap (by at least 5 cents, to help avoid a false breakout). I plan to use a stop below 25.60 in case $CORN does want to go on to test that 340 weekly support level.

CORN is being added a both a typically swing trade entry & setup as well as a Long-Term Trade Idea & Setup, as this trade is based largely off the weekly time frame and has the potential to morph into a long-term trend trade with additional targets likely to be added, should we get some decent technical evidence of a likely trend reversal in the upcoming weeks. Long-term traders & investors might consider a wider stop that that suggested above for typical swing traders. A stop somewhat below the 340 level on the $CORN weekly chart would still provide an attractive R/R if target the top of the R2 zone which comes in around 550.

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.

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