• ACI - Aug 13 201420140813
  • AEM - Jul 30 201420140730
  • AU - Jul 30 201420140730
  • AUQ - Jul 30 201420140730
  • AUY - Apr 16 201420140416
  • BTU - Sep 29 201420140929
  • CORN - Sep 11 201420140911
  • EGO - Jul 30 201420140730
  • GDX - Sep 08 201420140908
  • GDXJ - Jun 24 201420140624
  • GFI - Aug 28 201420140828
  • GG - Jul 30 201420140730
  • GLD - Sep 10 201420140910
  • $GOLD - Sep 10 201420140910
  • HL - Jul 30 201420140730
  • HMY - Jul 30 201420140730
  • IAG - Jul 30 201420140730
  • KGC - Jul 30 201420140730
  • KOL - Sep 25 201420140925
  • NEM - Aug 29 201420140829
  • NSL - Oct 02 201320131002
  • PAAS - Jul 30 201420140730
  • $SILVER - Aug 05 201420140805
  • $SIVLER - Sep 02 201420140902
  • SLV - Sep 02 201420140902
  • SLW - Jul 30 201420140730
  • SSRI - Jul 30 201420140730
  • WEAT - Sep 03 201420140903


Long-term Trades- Setups

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 292014
 
BTU 15 min Sept 29th

BTU 15 min Sept 29th

BTU (Peabody Energy) will be added as an Active Long Trade here around the 12.00 level. Multiple overhead resistance levels, all of which are potential targets on this trade, are listed on this 15 minute chart. As with the WLT coal stock trade, this should be considered a very aggressive, counter-trend

Although this is a short-term, oversold bounce trade based off the 15 minute time frame, BTU has the potential to morph into a longer-term bottom swing or trend trade. Recent volume pattern look capitulatory although we still need to see some decent evidence of a reversal or bottoming process on both the daily & weekly time frames before saying with any degree of confidence that the relentless selling in the coal stocks has likely run its course. With that being said, longer-term traders & investors could certain begin scaling into select coal stocks and/or the coal etf, KOL, which was recently added as a Long-Term Trade Idea (click here to view the charts & notes on that recent KOL entry & setup).

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 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 »

Sep 032014
 

Today both CORN & WEAT are trading below their recent consolidation ranges, which was mentioned a both a possibility as well as a potential criterion for those preferring a tight stop on these trades. In the previous (original) post on CORN, it was stated that an entry at that time would be somewhat aggressive as CORN has significant resistance not far overhead at the top of the July 21st gap, which is where the recent pop in CORN reversed when prices failed at that level.

As with the related WEAT ETF trade, today’s break below the recent trading ranges in both ETFs can be used as a tight stop for more active traders or those preferring to keep a tight rein on losses. However, as also stated in the previous post, CORN was also added as a Long-term Trade Idea with a suggested stop some below the 340 area on $CORN (spot corn) prices. As with the previous weekly chart & this updated weekly chart, the two most likely scenarios are drawn with the green arrows that show prices either breaking above the recent consolidation zone (much less likely now) or continuing lower to the S1 support area around 340, which is now the more likely to the two. Note how the MACD line is starting to curl up but has yet to make a bullish crossover, thereby yet to confirm the potential positive divergence that is forming although it does look likely by if/when price fall to the 340 level. Note: The chart of $CORN is an End of Day (EOD) chart of spot corn prices, meaning that the chart is only updated after the close of trading each day. Hence, I will use the daily chart of CORN (ETF) as well as corn futures in determining my entry & exit points.

As CORN is now trading well below the 25.60 tight stop level, it will be considered stopped out from the Active Long Trades category (typical swing trades) but will remain as both an Active Long-term Trade & Long-term Setup until/unless we get a solid weekly close on $CORN below the 340 support level.  As the daily chart of WEAT is very similar to CORN, I will also consider the Active Long Trade on WEAT stopped out on the break of support while leaving WEAT on as an Active Long-term Trade idea for now with stops TBD soon.

Click here to view the live, annotated weekly chart of $CORN (EOD spot corn prices) or click here to view the live, annotated daily chart of CORN (ETF).

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