• AGNC - Jan 24 201420140124
  • ALIAF - Mar 20 201420140320
  • ANV - Mar 05 201420140305
  • AUY - Aug 12 201420140812
  • $CDNX - Apr 03 201420140403
  • CORN - Sep 11 201420140911
  • EGO - Jul 10 201420140710
  • GDX - Sep 08 201420140908
  • GDXJ - Jul 31 201420140731
  • GFI - Aug 28 201420140828
  • GLD - Sep 22 201420140922
  • $GOLD - Sep 22 201420140922
  • HL - Mar 06 201420140306
  • HMY - Mar 26 201420140326
  • KGC - Mar 06 201420140306
  • KOL - Sep 25 201420140925
  • NEM - Aug 29 201420140829
  • SIL - Jun 06 201420140606
  • $SILVER - Aug 26 201420140826
  • SLV - Aug 26 201420140826
  • WEAT - Sep 03 201420140903
  • XVX.TO - Apr 03 201420140403


Long-term Trades- Active

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.

Sep 252014
 

KOL (Market Vectors Coal ETF) will be added as an AGGRESSIVE Long Trade & Long-Term Trade idea here around the 17.24 level. I’ve pointed out this long-term basing pattern in KOL recently and I’ve been following several of the individual coal stocks with interest lately, as they are in what looks to be the final stages of being “puked-up” by frustrated longs throwing in the towel and finally writing many of these companies off for good. I am fully aware of the environmental issues the coal industry faces and even some of the unique aspects within the US coal industry (e.g.- cleaner burning Appalachian coal vs. the “dirtier” but cheaper sulfur-laden Illinois basin coal). Here’s a link to an informative overview of the US coal industry for those who might be interested in this “catch a falling knife” trade.

Fundamentals aside, the technical case for an aggressive long entry here for either a bounce trade or very likely, a bottom in the coal stocks can be made from these two charts below. The first chart is a weekly chart of the Dow Jones US Coal Index, showing what appears to be an Inverse Head & Shoulders Pattern in the making. Keep in mind there is still quite a bit of work to be done on this pattern, first & most importantly would be to see prices reverse very soon in order to finish putting in a right shoulder (i.e. – a move back up towards the neckline of the pattern), while keeping the symmetry of the pattern intact.

Also included below is the daily chart for KOL, showing that prices are approaching the bottom of the 15+ month basing pattern while extremely oversold. Buying this support with the appropriate stops below seems like a very objective entry although keep in mind that many of the individual coal stocks in a virtual death spiral, under extreme distribution and in such instances, it is not uncommon to see a substantial but relatively brief overshoot of support. As such, my preference taking a position here as a potential long-term/bottoming play would be to use a stop criterion of three consecutive weekly closes below the 17.00 level. That should allow enough time for any temporary, momentum driven overshoot of support to regain the bottom of the long-term basing pattern, assuming that this is indeed a selling climax in the coal sector.

 

 click here for the live, annotated weekly chart of $DJUSCL       click here for the live, annotated daily chart of KOL 

I also have a short list of my favorite individual names in the coal sector which I might also add as official trade ideas soon. That list includes CLD, OXF, YZC* (a Chinese coal stock), WLT, NRP, ACI, &  BTU. I can not stress enough the risk involved in buying any of these individual coal stocks as most are still in free-fall and the risk of bankruptcy on any of these names in the near future is certainly a possibility. With coal still being the cheapest energy source and a presidential election coming up (lost coal jobs = lost votes, hence, I would expect some pandering/support to the US coal industry from both parties in the very near future), my guess is that even if the coal industry is going the way of the prehistoric plants & animals that created it, the extinction of the US coal industry isn’t going to happen overnight.

On a final note, my preference for positioning into the individual coal stocks as potential bottoming or even just “oversold bounce” trades is to use a shotgun style, scale-in approach: buying very small lots in each of the individual names above over the next several weeks, only bringing my exposure to the sector to a “full position” once we get some fairly decent evidence of a trend reversal. As always, DYODD and only consider trades that align with your own risk tolerance, objectives & trading style.

Sep 222014
 

The first chart below is a 10-year weekly chart of GLD (gold ETF) showing illustrating the scenario that would have gold prices temporarily breaking below the mid & late 2013 lows before reversing. Such a move could serve as a powerful, stop-clearing, short-selling bear-trap, providing the necessary fuel to finally take out the three previous reaction highs put in over the last year or so. If this were to be the case, that might take GLD down to about the 110ish area, about 6% or so below current levels. Of course that is just one of many possibilities and I would continue to put nearly equal odds that gold reverses just shy of the 114.50ish double-bottom lows from last year. Zooming down to the 60 minute time frame, GLD continues to drift lower within this falling wedge pattern with bullish divergences still in place. The recent volume surge may indicate seller capitulation. A solid break & close above the wedge would an early sign of a possible trend reversal.

Sep 182014
 

Let’s take a look at the charts of gold from a top-down approach, starting with the weekly chart. As mentioned in some of the previous updates on gold, a solid weekly break & close below the long-term uptrend line on the weekly chart of $GOLD (spot gold prices) would likely open the door for a move down to test the mid & late 2013 lows in gold prices. With $GOLD closing slightly below that uptrend line last week and, barring a very sharp rally into the close tomorrow, it looks like $GOLD will print another weekly close below that key support level, hence, I remain open to the possibility of additional downside in gold before any meaningful reversal. I had also previously stated that because so many eyes are on that mid & late 2013 double bottom, that I wouldn’t be surprised to see gold either reverse just shy of that level or to break below that level (either intra-week or for up to a few weeks) in order to shake out the last of the weak hands via a bear trap/flush-out move before a lasting bottom is put in place in the shiny metal. Of course that is making the assumption that the bear market in gold that began in Sept 2011 has run its course and that it was just another cyclical bear market within a much larger secular bull market in gold that has more room to run. Only time will tell if that proves to be the case but one of the factors that keeps me in the longer-term bullish camp on gold at this time (other than fundamentals) is the fact that even if we do take out the mid/late 2013 double bottom lows, gold prices have a very, very long way to fall before negating (i.e.-undoing) the very powerful bullish divergences that would remain in place on both the weekly PPO (similar to the MACD) and the RSI, as well as several other long-term price & momentum indicators and oscillators.

$GOLD weekly Sept 18th

$GOLD weekly Sept 18th

 

Moving down to the daily time frame on GLD (Gold ETF),  a case can certainly be made that, at the very least, the chances for a short-term bounce in gold are quite elevated at this time. Although this chart only shows 2 1/2 years of price history, if you look back over a decade on a daily chart of GLD you will see that, without fail, every single time the RSI 14 moved below the 30 (oversold) level, Continue reading »

Sep 112014
 

As a follow-up to the previous post with the $CORN (Spot Corn Prices) weekly chart, below is the 5-minute chart of US Corn Futures as well as the weekly chart of CORN (Corn ETF), highlighting the current volume surge which is indicative of a selling climax.

click here to view the live, streaming chart of US Corn Futures. Once the page to Investing.com opens, from the top of the chart select: Instruments/More Instruments & then “U.S. Corn Futures” under the Commodities section.

Sep 112014
 

$CORN weekly Sept 11th

In the most recent update on the CORN (Corn ETF) Long-term Trade idea posted last week, it was stated that CORN had broken the 25.60 support level (below the recent consolidation range) which would likely open the door for a move down to the 340 major support level on $CORN (spot corn prices). Since the original post on the CORN trade idea back on July 28th, I had highlighted two likely scenarios for $CORN: either a bounce from around where $CORN was trading at the time OR a continued move down to the 340 level in which not only bring corn prices down to a key long-term support level and that we would also likely have strong bullish divergences in place on the weekly PPO when/if prices got there.

Although the chart of $CORN (spot prices) is an end-0f-day (EOD) chart, not updated until after the market close each day, I’ve been watching US Corn futures today and so far they kissed a low of 335.87 just a few minutes before I started working on this post and have since reversed sharply so far. Of course the day is still young but regardless of any short-term gyrations, we now have corn prices at key long-term support while extremely oversold (the weekly RSI 14  on $CORN was at an extreme level of 23.73 at yesterday’s close). We have the strong bullish divergences forming on the PPO as well as volume patterns on CORN (corn etf) that are indicative of a selling climax (ditto for WEAT, which I will cover under a separate update).

After stopping out the recent Active Long (swing trade) on CORN last week, I am going to add CORN back on as a new Long Trade idea. I also believe this is an objective area for a new entry or add-on to an existing position for the CORN Long-term Trade idea (investment) that was initiated in the July 28th post.

click here to view the live, annotated weekly chart of CORN

Sep 102014
 

GLD 60 minute Sept 10th

GLD is now within 65 cents of the aforementioned 119.50ish support level while rapidly approaching the apex of this 60 minute bullish falling wedge pattern, complete with positive divergences in place on the RSI & MACD. An upside break above the pattern would likely propel GLD to at least the 122 area, possibly higher.

Sep 082014
 

Starting with the longer-term picture for gold & the gold mining stocks, I will be waiting to see how $GOLD (spot gold prices) close out the week as $GOLD closed right on the nearly 13 year long-term uptrend on Friday, a key major support level. As with all weekly charts, it is the end-of-week (Friday) close that matters as intra-week spikes below support are not unusual.  As mentioned in the past, should $GOLD make a solid weekly break below this long-term uptrend line, that would open the door for another test of the mid & late 2013 double-bottom lows, the next major support level for gold. A link to the live, annotated weekly chart of $GOLD is available on the Live Charts page and can also be viewed by clicking here.

$GOLD weekly Sept 8th

Moving down to the 4-hour period of GLD that I’ve been covering lately, following last Tuesday’s gap below the symmetrical triangle pattern (bearish), followed up by Thursday’s failure upon backtesting the triangle pattern from below (additional bearish confirmation), prices are likely headed towards the aforementioned 119.50ish support area before any significant reversal. Therefore, my best guess for gold prices in the near-term, Continue reading »

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