• CAM - Jan 13 201520150113
  • DO - Jan 13 201520150113
  • GFI - Aug 28 201420140828
  • NOV - Jan 13 201520150113
  • $Platinum - Nov 21 201420141121
  • PPLT - Nov 21 201420141121
  • QEP - Jan 13 201520150113
  • RIG - Jan 13 201520150113
  • SFY - Jan 13 201520150113
  • SLB - Jan 13 201520150113


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.

Jan 132015
 

The longer that I trade & invest, the more it seems like I'm watching the same movie played over & over every few years. It's the never ending cycle of booms & busts and if I were to categorize the genre of movies that I'm watching, I'd have to lean more towards labeling them as comedies vs. dramas. The comedic part is the infallible repetitive nature of the general public, the mainstream media and, of course, the part played by the puppeteers pulling the strings.

Funny to see how bearish the most recent headlines are AFTER crude has plunged nearly 60% in just over 6 months. Where was all that talk of a massive glut in crude production back then? If one just stops reading the headlines and focuses on the charts, they might come to the same conclusion that I have that a bottom in crude is much closer than both the media and the puppeteers  (hedge funds/institutions that are talking oil down right now while most likely taking the other side of the trade... think GS betting against their clients at the peak of the housing bubble).

I've highlighted two developments on this 20-year weekly chart of $WTIC, the first being a specific technical event (weekly oversold readings on the RSI 14) and the other relating to fundamentals (under-supply & over-supply). As a full-time trader back in 2007 & 2008, I clearly remember the almost manic cries about peak oil. Hardly a day went by without reading or hearing about how the reality of peak oil was rapidly closing in on the world. Once oil crossed the $100/bbl in early 2008 the chatter only intensified and by the time oil reached nearly $150/bbl a few months later, even the guy that cuts my grass was talking about how $10/gallon gas was right around the corner. Click here to view on article published by Investopedia back in 2008 which concludes with the following statement: Even conservative estimates predict a peak in years, not centuries. The question now is what will we do to be ready for it?

We all know what happened from there and even with the roughly 75% plunge in oil prices that immediately followed the July 2008 peak in crude oil prices, crude didn't even come close to reaching such oversold extremes as it now has (although the "supply glut" chatter seems to be about on par with the "peak oil" chatter back then as best I can recall). With that being said, I've started combing thru the charts looking for some long-side trade ideas on energy related stocks, some as both potential bounce (oversold) trades as well as longer-term bottoming plays, in which I plan to use a scale-in strategy. Some of the candidates that I found so far that fit both categories (poised for a potential bounce and possibly a longer-term trade) are: RIG, SLB, CAM, DO, QEP, NOV & SFY. I will follow-up with some charts including entry & exit (targets/stops) levels asap,  on some of these as well as any other attractive candidates in the sector that I come across but I just wanted to throw out a few names at this time for those who might want to start adding some exposure to the energy sector (other than trading crude oil directly).

The charts below (in order) are: A 20-year weekly chart Light Crude Oil ($WTIC); a screenshot of a Google search for "Peak Oil", narrowed down to headlines from Jan 1, 2008 - July 11, 2008 (the week that crude oil prices peaked at their all-time high); a snaphot of the aforementioned Investopedia article showing the "experts" prediction for peak oil; and finally a screenshot of a current (today) Google search for the term "oil production glut" (noting how the vast majority of "experts" predict this glut to continue for years).

Nov 212014
 

PPLT (Physical Platinum Shares ETF) offers an objective long entry on this breakout above the bullish falling wedge pattern. T1 is the sole target at this time with additional targets likely to be added soon, depending on how the charts play out going forward. Suggested stop below 117.64 or higher if targeting only T1 although longer-term traders & investors might consider a scale-in strategy with higher price targets & wider stops.

With the $USD still in an uptrend and GLD currently still attempting to solidly take out the 115 level, more conservative traders & investors might opt to wait for those aforementioned events (dollar reversal & a confirmed GLD breakout) to occur before establishing a position. We've also yet to see a confirmed, end-of-day breakout in $PLAT (spot platinum prices) although keep in mind that the spot charts below are EOD (end-of-day) and reflect yesterday's closing prices. Platinum futures are currently trading up nearly 2% so a close above the downtrend line on the daily spot chart below today is likely, barring a reversal into the close.

Daily chart of PPLT along with the daily & weekly charts of $PLAT (end-of-day spot platinum prices) below. Besides PPLT & futures, there are several other options for trading platinum although these are all thinly-traded ETFs: PGM, PTM, PLTM, LPLT, & SPPP. Click here for information on PPLT.

Aug 282014
 

GFI (Gold Fields Ltd) was one of my top picks covered in the July 30th Gold & Gold Mining Sector video.  At the time, had pointed out the nice basing pattern that GFI had formed with the next buy signal to come on a break above the 4.38-4.40 resistance level, which GDI has clearly taken out this week. This gold mining stock has shown some nice relative strength lately having gained 16% since that video was posted less than a month ago while the gold mining sector (GDX) has just chopped around since then and is currently trading slightly below its July 30th close.

GFI was added as a Long-Term Trade setup when the video was published and following the breakout above the 4.40 resistance level, is now considered an Active Long-term Trade. However, despite the recent bullish price action in GFI, I did want to point out that GFI is now approaching a key long-term resistance level that comes in around the 4.70 area as shown on the weekly chart below. Any solid weekly close above that level will trigger the next long-term buy signal for an entry or add-on to an existing position in GFI. Of course, as always, it is imperative to manage your positions in the individual mining stocks along with the charts of both gold ($GOLD/GLD) & the gold mining sector ($HUI/GDX) as the success or failure of these trades, especially when positioning as long-term swing or trend trades, will largely depend on where gold prices are heading.

Bottom line: Although some gold & silver stocks have outperformed the mining sector and may trigger buy signals as they break out of bullish chart patterns or above key downtrend lines or resistance levels, gold & silver, although still looking bullish from a longer-term perspective, remain in somewhat precarious technical positions at this time and still have some work to do in the near-term in order to help solidify the case that a new bull market is underway. Therefore, make sure to use stops and position sizing commensurate with your own trading style & risk tolerance when trading the miners along with proper diversification, particularly if trading individual names vs. the diversified mining ETFs such as GDX, GDXJ, & SIL.

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