• AUY - Apr 16 201420140416
  • BXS - Jul 22 201420140722
  • CDE - Jun 27 201420140627
  • $CDNX - Apr 03 201420140403
  • COWN - May 07 201220120507
  • CSGP - Jul 16 201420140716
  • FISV - Jul 23 201420140723
  • FRC - Jul 16 201420140716
  • GDX - Jun 24 201420140624
  • GDXJ - Jun 24 201420140624
  • HAIN - Jul 21 201420140721
  • HSY - Jul 21 201420140721
  • KBE - Jul 21 201420140721
  • KRE - Jul 15 201420140715
  • NSL - Oct 02 201320131002
  • PACW - Jul 17 201420140717
  • PNC - Jul 17 201420140717
  • VHI - Jul 22 201420140722
  • XVX.TO - Apr 03 201420140403


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.

Jul 232014
 
FISV daily July 22nd

FISV daily July 22nd

FISV will be added as an aggressive short entry here around the 62.40 level (current price is 62.42 as I type) near the top of this wedge pattern as well as a Trade Setup for a more conventional entry or add-on to an existing position if/when prices break below the bottom of the pattern (primary uptrend line). Suggested stop for this aggressive entry above 64.00. My plan is to take a partial position here, only bringing to a full position if & when prices break below the pattern.

Note: FISV is schedule to report earnings after the close next Tuesday, July 29th. One more reason for more conservative or conventional swing traders to wait for a confirmed break below the wedge pattern before establishing a position.

click here to view the live, annotated chart of FISV

 

Jul 222014
 

The VHI (Valhi Inc) Active Long Trade appears to be breaking out of a bull flag continuation pattern today. VHI triggered a long entry on a break above the 5.50 resistance level on June 25th & is currently trading about 28% above that level after gaining about 40% before pulling back. That pullback, which was greatly needed in order to work off the extreme near-term overbought conditions, resulted in prices moving gradually lower on diminishing volume, which is what you want to see during a pullback or consolidation within a bullish trend. That pullback formed what appears to be a bull flag continuation pattern and today prices have broken above the pattern and have been building on those gains so far. The previous & updated 60 minute charts are posted below but the official profit targets remain as previous posted on the daily chart (click the VHI symbol tag at the bottom of this post to view all prior notes & charts on this trade).

I will say that I would prefer to see a considerable expansion of volume on the breakout of this pattern which so far, is not the case. However, price action comes first in my book, volume second, so for now I’m watching to see if VHI can take out the recent highs of 7.63 put in a place about two weeks ago. Such a move, especially if we start to see an increase in volume as the stock rises, would increase the odds of VHI moving up to at least the 8.10 resistance area, if not all the way to the 10.20ish area, which is about where the bull flag pattern projects to. As stated earlier, this is an very aggressive trade so as always, DYODD and consider adjusting position sizing to account for the above average risk & return potential.

Jul 222014
 
BXS daily July 22nd

BXS daily July 22nd

The BXS (Bancorpsouth Inc.) short trade has broken below the neckline of the Head & Shoulders pattern, thereby triggering the second entry or add-on. BXS was first posted as a Short Trade Setup on Thursday and triggered an entry later that day, with prices breaking below the primary uptrend line. This trade also listed a second entry or add-on criteria of a breakdown below the neckline of the H&S  topping pattern which occurred via a large gap down today.

Prices overshot the neckline by quite a bit immediately following the open today and have since snapped back somewhat & are trading right on the neckline as I type. Therefore, best to wait for the next move below the NL, below the 21.85 area to be safe, before adding to or initiating a new position if not done so already. Also note that the suggested buy-to-cover level for the targets have been added to the bottom right quadrant of this updated chart.

Click here to view the live, annotated chart of BXS

Jul 212014
 
KBE daily July 21st

KBE daily July 21st

Nearly identical to the recent KRE (regional banking sector ETF) short trade idea, the KBE (KBW Bank ETF) has two distinct but not unrelated bearish pattern formations: The blue lines show a breakdown & backtest of the primary uptrend line/bearish rising wedge pattern (complete with a divergent top) while the black annotations show a Head & Shoulders topping pattern with prices currently forming the right shoulder.

The fact that all of the recent short trade ideas are financial stocks (all regional banks plus one REIT) coupled with the warning signs that I’ve been pointing out in the credit markets is most likely not a coincidence. Although I only posted the recent bank & REIT short trade ideas based on their bearish technical patterns, if there are problems brewing in the credit markets, many of the financial related stocks (banks, brokers, REITs, insurance co’s, credit card companies, etc…) will most likely come under selling pressure.

I still plan to add a few more individual regional banks as short trade ideas although I’m still narrowing down my short-list of the most attractive names in the sector. While I’ve been focusing on the regional banking sector, the banking sector as a whole, including the some of the mega-cap TBTF institutions, are starting to look precarious from a technical perspective. As such, I’m going to go ahead and add KBE as an Active Short Trade at current levels with a sole profit target of 27.60 and a suggested stop above 34.00, which is the top of the right shoulder on this potential H&S pattern.

As with the recent KRE (Regional Bank ETF) short, this is only a potential H&S pattern as the right shoulder has yet to be fully formed. Therefore, more conservative or conventional traders might wait to see prices break below the neckline, assuming that the pattern fully develops. Although KBE holds multinational, mega-cap banks in addition to regional banks, the charts of KRE & KBE are nearly identical as there is a large overlap of holdings. Keep this in mind regarding portfolio or position diversification if already short KRE one or more of the regional banking stocks.

On a final note, the popular XLF (Financial Sector ETF) is also on my radar as one of the more promising swing-short candidates. I haven’t pulled the trigger yet but there are several large financial companies, in fact many of the largest components of the XLF, including banks, credit card companies, insurance companies, & even the almighty BRK-B (Berkshire Hathaway cl.B) that although not ready yet, may be setting up as potentially lucrative swing-short trades.

Jul 212014
 

HAIN (Hain Celestial Group Inc) will trigger a short entry on any move below Thursday’s low of 84.79, which will confirm a breakdown below this symmetrical triangle (daily chart).

As the weekly chart below illustrates, a more powerful, longer-term sell signal on HAIN will come on a weekly close below the multi-year primary uptrend line in the stock which makes up part of a very large bearish rising wedge pattern, complete with negative divergences on the PPO & RSI leading up to the January 21st top in the stock.

click here to view the live, annotated daily chart of HAIN                    click here to view the live, annotated weekly chart of HAIN

Jul 212014
 

HSY (Hershey Foods Corp) will be added as a Active Short Trade here around the 93.85 level. HSY recent broke below this 5+ year bull market primary uptrend line with strong bearish divergences in place before the breakdown (weekly chart). HSY bounced on Friday & opened just below the bottom of last Wednesday’s gap today (see daily chart) which offers an objective short entry as that gap will likely act as resistance. For more conservative traders not willing to short until clear evidence of a trend reversal in the broad markets (which I think we will soon get), alternative short entries on HSY might also be made on any bounce back towards the 96 area (resistance) or a break below the 90.25ish area (support)… see daily chart below for both those levels/scenarios.

This trade is based primary off of the weekly time frame & should be considered a longer-term swing trade. Targets are listed on the weekly chart below with suggested stops using an R/R of 3:1 or better based on one’s preferred target and average entry price. Daily & weekly charts below.     Click here to view the live, annotated chart of HSY

Jul 172014
 
PNC daily July 17th

PNC daily July 17th

The PNC (PNC Financial Services Group) short trade setup posted yesterday triggered an entry today on a solid move below the 84.52 level. T1 at 78.20 remains the sole profit target for now but I’ve also added a potential target zone which comes in around the 72-73 area (with the exact suggested buy-to-cover level to be added if/when that target is officially extended).

click here to view the live, annotated chart of PNC

Additional notes: The BXS short setup posted earlier today has also triggered an entry by crossing below the uptrend line. KRE is one of the largest declining sectors today, trading down over 2x the losses of the SPY & QQQ on above average volume, so far a good sign that a right shoulder may be forming but still too early to say with confidence.

The SPY just kissed the bottom of the bearish rising wedge pattern shown here in the last update on Wednesday. The SPY may or may not need one more thrust up back inside the pattern but is starting to approach the point within the pattern where breakdowns typically occur. Therefore, any significant move below today’s lows on the SPY would signal a breakdown of the pattern & likely usher in additional selling.