• AA - Sep 22 201420140922
  • ACI - Aug 13 201420140813
  • AON - Sep 23 201420140923
  • AXP - Jul 25 201420140725
  • BTU - Sep 29 201420140929
  • BXS - Sep 23 201420140923
  • CORN - Sep 11 201420140911
  • COWN - May 07 201220120507
  • FFIN - Aug 14 201420140814
  • FISV - Sep 26 201420140926
  • FRC - Jul 31 201420140731
  • GDX - Aug 12 201420140812
  • GDXJ - Jul 31 201420140731
  • GLD - Aug 06 201420140806
  • GMCR - Sep 25 201420140925
  • $GOLD - Aug 06 201420140806
  • HSY - Jul 21 201420140721
  • KBE - Jul 21 201420140721
  • KIE - Jul 31 201420140731
  • KOL - Sep 25 201420140925
  • KRE - Jul 31 201420140731
  • LYV - Jul 29 201420140729
  • NSL - Oct 02 201320131002
  • OZRK - Sep 23 201420140923
  • PACW - Jul 17 201420140717
  • PNC - Jul 17 201420140717
  • SAVE - Jul 24 201420140724
  • $SILVER - Aug 22 201420140822
  • SLV - Aug 22 201420140822
  • SOYB - Sep 12 201420140912
  • $SPX-SPY - Sep 25 201420140925
  • TSLA - Sep 23 201420140923
  • WAB - Sep 15 201420140915
  • WLT - Sep 29 201420140929


Trade Setups

Trade Setups are potential trade or longer-term investment candidates that are setting up in a well defined chart pattern. Once/if the pattern triggers (i.e.- a break-out or break-down), the trade idea will become an Active Trade until either the price target(s) are hit or the trade is stopped out. However, some Active Trades will also remain in the Trade Setups category after triggering an entry as long as the trade still provides an objective entry. Therefore, many trades on this site will often be assigned to multiple categories.

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 292014
 
WLT 15 min Sept 29th

WLT 15 min Sept 29th

The WLT short-term Trade Setup posted on Friday has triggered an entry today on the pop above 2.30. I’ve added a couple of downtrend lines to this updated 15 minute chart, the first of which has served to act as resistance so far. Once/if we get a solid and sustained break above these intersecting resistances levels (the 2.30 horizontal resistance & the first downtrend line), prices will likely rip higher to at least the first target, which has been revised to the first of the 2.60 level OR the upper-most downtrend line.

Once again, this trade has the potential to morph into a longer-term trade, depending on how both WLT & the coal sector trades in the coming days/weeks. I’ve also added a second possible price target for this short-term trade at 3.20 (5 cents shy of the 3.25 resistance level). As of now my preferred target for this quick trade, assuming we get a breakout that sticks soon, remains T1 although that could be extended to T2 soon.

On a related note, BTU, another coal stock, has just broken above a similar 15 minute bullish falling wedge pattern earlier today & is currently backtesting the wedge from above.

Sep 262014
 

In my haste to get the previous short-term trade setup on WLT published, I had incorrectly listed the stops if targeting only the first target at 2.60 as either a move below 2.08 or 2.12 (the previous reaction lows). Those stops suggestions are for the potential longer-term target around the 3.25 level mentioned in that previous post. That area, as well as one other resistance/potential target before that around 2.94, might be extended as the preferred target assuming this trade even triggers and entry and only then, depending on how the other coal stocks are trading. If only targeting the 2.60 level (or maybe as high as 2.63, as I like to sell just before the actual resistance), consider a stop just below the 2.30 breakout level, say 2.25 – 2.19.

Sep 262014
 
WLT 15 minute

WLT 15 minute

I had received some positive feedback recently about posting more short-term trade setups based off of the intraday time periods. These trades, successful or not, will typically only a few hours to a few days. Yesterday I had mentioned WLT as one of the coal stocks caught up in the relentless selling in the US coal sector. This should be a considered a very aggressive trade. WLT will trigger a long entry on the next pop above 2.30 with a current target of 2.60 (resistance is 2.67) and a suggested stop either below 2.08 or 2.12. Current price as I type is 2.23. Again, I am looking for the next move over 2.30 as the entry trigger for this trade (current time is 11:04am ET).
WLT also has the potential to morph into a Long-Term Trade (i.e.- investment or trend trade) should this short-term trade pan out as that might put in a potential reversal stick on the daily chart. More on the longer-term outlook later.

Sep 262014
 

FISV (Fiserv Inc) will trigger a short entry on a break below this 3 year primary uptrend line/bearish rising wedge pattern. T1 (1st target) is 54.38 & T2 (the final & preferred swing target) at 48.05. Stops to be determined upon entry but my expectation is that a breakdown of this pattern is imminent at this point and if so, my likely stop would be just over the recent highs of 66.11. If FISV were to trigger a short entry soon, this trade would offer a very attractive R/R of about 5:1 to the final target and 3:1 to the first target (where a reaction is likely).

 

click here to view the livedaily chart of FISV       click here to view the live weekly chart of FISV

Back on July 22nd, FISV was recently added as both an aggressive short entry (Active Trade) at 62.30, in anticipation of a breakdown below the trendline, as well as a Short Trade setup with an initial, conventional short entry or an add-on to the aggressive trade to be triggered on a break below the trendline. With prices yet to trade below the trendline, this is really just an extension of that previous, untriggered trade setup. However, the stop criteria for the aggressive trade was a move over 64 which just recently occurred. Therefore, that trade was stopped out and moved to the Completed Trades category. However, for anyone who might have shorted FISV back then and still holds a position, this trade still looks very promising from a longer-term perspective so consider a stop slight above the recent high of 66.11 or calculated on a 3:1 R/R to your preferred swing target, depending on your cost basis for the position.

 

Sep 252014
 

GMCR daily Sept 25thGMCR (Keurig Green Mountain, Inc) will trigger a short entry on any move below 125.35 (5 cents below the 8/22 gap). T2 is my preferred swing target at this time with a final target (T3) at 84.02. Suggested stop slightly above the recent highs for those targeting T2 or T3 with a tighter stop suggested if only targeting T1.

GMCR was recently added as a Short Setup on August 8th with an entry to be triggered on a move below 112. The stock never did trigger an entry so the notes and previous charts on that setup have been moved from the Short Setups to the “Uncategorized” category (as untriggered trade setups never become Active Trades, hence, are not moved to the Completed Trades category). However, as with all previous posts, those recent posts on GMCR are still accessible by clicking on any of the “GMCR” tags, such as at the bottom right corner of this post.

The second divergent top highlighted on this 3 year daily chart of GMCR comes shortly on the heels of the recent, much larger divergent high (blue lines). Taken together, the bigger picture (dashed red line), shows a very powerful, divergent high going all the way back to February. Translation: I’m not looking for a quick trade on GMCR, rather a multi-month correction that will likely result in a drop well into the double-digits (a 33% gain if T3 is hit).

click here to view the live chart of GMCR

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.

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