• ACI - Aug 13 201420140813
  • ANR - Aug 07 201420140807
  • AUY - Aug 12 201420140812
  • CDE - Jun 27 201420140627
  • $CDNX - Apr 03 201420140403
  • CORN - Sep 11 201420140911
  • GDX - Aug 12 201420140812
  • GDXJ - Jul 31 201420140731
  • GLD - Aug 06 201420140806
  • $GOLD - Aug 06 201420140806
  • NSL - Oct 02 201320131002
  • REMX - Aug 08 201420140808
  • $SILV ER - Jul 31 201420140731
  • $SILVER - Aug 22 201420140822
  • SLV - Aug 22 201420140822
  • SOYB - Sep 12 201420140912
  • XVX.TO - Apr 03 201420140403


Long Setups

Long Setups are stocks or ETFs that are in a bullish technical pattern formation that are poised to break-out and provide an objective long entry. This category may also include stocks that have already triggered a entry but still offer an objective entry or add-on, such as a during a pullback to support.

Sep 122014
 

DBA HoldingsSOYB (Soybeans ETF) will be added directly as an Active Long Trade at current levels (last trade was 20.46). I will make a case for the SOYB long trade below but keep in mind that SOYB is a thinly traded ETF and is one of several active long trade ideas in the soft commodities/agricultural industry. I also plan to likely add DBA (agriculture ETF) which holds the following stakes in various ag related commodities, including a target of 12.5% in soybeans futures.  Click on this DBA holdings chart to view the complete current weightings in DBA. With plenty of liquidity and the added benefit of diversification amongst various agriculture commodities (which can also act as a drag on performance, should some of the components lag), DBA is certainly a viable option for traders or investor seeking exposure to the ag sector at this time. I’m not bullish on all of the components of DBA, hence my reasoning for posting, as well as personally going long only select agricultural commodities at this time. However, with that being said I do think the chart on DBA is setting up bullish and will cover DBA in a separate post soon.

Although one could certainly trade soybean futures in lieu of SOYB, the trade ideas on RSOTC are limited to individual stocks and exchange traded products (ETFs, ETNs, CEFs, etc…) as those are the most popular and accessible trading vehicles for the majority of traders and investors.  Each individual may opt to trade futures contracts, options, or leveraged ETFs as a play on any of the trade ideas shared here. Even with the low volume on SOYB, the spreads do not seem excessive and unlike closed-end funds (CEFs), which often trade at substantial discounts or premiums to the underlying holdings, SOYB trades at NAV. With that being said, I typically prefer to use limit order vs. market orders on thin volume stocks & ETFs.

As with the recent WEAT & CORN trades, SOYB is clearly an attempt to catch a falling knife as prices have been in a powerful downtrend since peaking earlier this year. Therefore, this trade should be considered fairly aggressive until/unless we get some decent evidence of a trend reversal. Looking at the weekly chart of $SOYB (the spot price of soybeans), it appears that soybeans have fallen to the bottom of a decent support zone following a rarely seen overbought reading on the RSI 14. As this chart illustrates, very sharp rallies have immediately followed shortly after the RSI reached oversold levels. In fact, the exact bottoms did not come on the initial oversold reading but very shortly afterwards following a higher low on the RSI, such as we now have.

$SOYB weekly Sept 11th closing price

 

Zooming down to the daily time frame, $SOYB printed a hammer candlestick yesterday which is a potential reversal stick (pending upside follow-thru over the next few sessions). $SOYB also has very strong bullish divergences in place as it just tagged what appears to be the bottom of a descending price channel. My targets for SOYB will be roughly based off of this daily spot price chart as well as soybean futures. T1 (the 1168ish area) is my first & preferred target at 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

Aug 222014
 
SLV 60 minute Aug 22nd

SLV 60 minute Aug 22nd

With SLV (Silver ETF) having pulled back to nearly the 78.6% Fibonacci retracement level, a break above this bullish falling wedge/contracting channel would likely signal the end of the near-term downtrend in silver prices. The white horizontal lines mark a few of the near-term targets.

Should prices continue much lower, SLV may test the critical 17.75ish support level that marks the mid-2013 & mid-2014 double bottom lows. Any break & sustained move below that level would have longer-term bearish implications for SLV. By sustained, I am referring to anything other than a relatively brief & shallow break below that support level which could serve as a bear-trap/flush-out move assuming prices were to regain the 17.75ish level shortly afterwards (a bullish event).

As of now, I favor a reversal in both GLD & SLV from at or near current levels but remain open to all possibilities as the precious metals are in a somewhat precarious technical position at this time.

Aug 132014
 
ACI daily Aug 13th

ACI daily Aug 13th

ACI (Arch Coal Inc) is one of several coal stocks on my watchlist that may be poised for primary trend reversal following a powerful bear market in the coal related stocks. ACI will trigger a long entry on any move over 3.25, which will have clearly taken the stock above both this bullish falling wedge pattern as well as this resistance zone. Suggested stops using a 3:1 R/R based on one’s preferred target(s).  Also note that I currently have three likely profit targets listed, T1-T3, along with the first decent resistance level, R1, which comes in around the 3.45.-3.48 area. That level could also be used as an early target for those preferring to book quick profits while there are also two additional resistance levels above T3 which may be added as additional price targets, depending on how both ACI and the coal sector perform going forward.   click here to view the live, annotated daily chart of ACI

As recently mentioned in the ANR long trade entry post (which can be viewed here), I’ve been monitoring some potentially bullish developments on the coal sector and have about a half-dozen coal stocks on my watchlist at this time. Some of those charts need a little more work while there are a few others that have either recently broken out or are getting close and as such, will be added as Trade Setups and/or Active Trades soon.

Also keep in mind that although the coal sector, including the ETF KOL, appears to be carving out a potential bottom, it is still too early to officially declare that the bear market in the coal stocks has ended and as such, best to adjust your position size on these trade ideas accordingly, especially on some of the lower priced and more volatile coal stocks, should you decide to play the sector via individual stocks vs. the KOL ETF (which is not yet an Active Trade at this time).

ACI will be added as both a Long Trade Setup (a typical swing trade, with an expected holding period ranging from a couple of weeks to several months) as well as a Long-term Trade Setup (trend or investment trades with above average return potential and holding periods of typically 6-12 months or more).

Aug 122014
 
GDX weekly Aug 12th

GDX weekly Aug 12th

The Inverse Head & Shoulders bottoming pattern on the GDX (Gold Miners ETF) is now fully formed with volume patterns confirming this potentially powerful reversal pattern. With prices currently up against the neckline, any solid weekly close above the pattern would trigger a long-term buy signal for the miners although my preference will be to see any breakout of this IHS pattern confirmed by a bullish breakout in GLD, as per the recently discussed criteria. My price target, should both GDX and GLD confirm the long-term buy signals, would be the 38.50-39.00 area with the first and only major resistance area before then expected to come in around the 31.30ish area. As such, should both GLD & GDX trigger these long-term buy signals, my expectation would be to see the miners play out per this scenario drawn with the orange lines: A sharp move towards the 31.30 area, followed by a tradeable pullback off that resistance area, then followed by one final thrust up to the 38.50-39.00 target area.

Astute Ellioticians might notice how well this scenario fits into a basic 5 wave sequence with wave 1 (up) starting from the Dec 31st lows (i.e.-bottom of the head), wave 2 down being the move from the NL down to the bottom of the right shoulder, wave 3 up in progress now and to be continued until the 31.30sih pullback target (and yes, wave 3 would measure as the most powerful wave, should the pullback (wave 4) be relative minor as expected), and finally followed by a 5th wave up to hit the final target area of 38.50-39.00.

Sounds almost too perfect and as I always say, predicting future price moves is a lot like forecasting the weather; the cone of accuracy widens along with the time period of the forecast.  e.g.- Mr. Weatherman can tell you with a fair degree of accuracy the chance of rain tomorrow and throughout the week as well as the expected temperatures but not so much what conditions will be like 3-6 months from now. As with weather forecasting, a market technician must continually revises and adjust his/her expectation of where prices are headed as the data (chart/price action) changes over time.

One final note to add: Assuming gold continues to move higher and this IHS pattern on GDX goes on to breakout soon, one variation to this scenario would be to allow for the possibility of a backtest of the neckline shortly following the breakout, a fairly common occurrence.

Aug 122014
 
GLD 120 minute Aug 12th

GLD 120 minute Aug 12th

I haven’t had much to say regarding gold & gold mining stocks as nothing technical has changed since the highlighted bullish falling wedge breakout in GLD last week on the 60 & 120 minute time frames. That was the first bullish catalyst that I was looking for and as I’ve repeatedly stated, my primary focus is on gold prices as the miners will ultimately follow the metal.

Although we did get an impulsive breakout of that 60-120 minute bullish falling wedge, there is still some work to be done in order to solidify the longer-term bullish case for gold & the mining stocks. From here, GLD will either go on to break above the July 17th reaction high of 127.40 (bullish) and then, hopefully, go on to take out the July 10thth high of 129.21 and ultimately the March 14th reaction high of 133.69, which would be extremely bullish & most likely confirm that a new cyclical bull market in gold is indeed underway.The bearish case would have GLD making a solid break below the aforementioned 123 support level and even worse, the June 3rd reaction low of 119.42, which would open the door for a retest and possible break of the all-important mid & late 2013 double bottom.

Regarding my upside targets for the exposure that I added back to gold & the mining sector last week, here are my replies to a couple of recent inquired on both the miners as well as a specific trade (AUY):

Q: What are your GDX targets?

A: (from last week)- Potentially much higher. This was my buy-back-in for the next leg up in the metal & miners this week. Given, there is still a lot of technical work to be done, the first major step being a break above the July 10th highs in both GLD & GDX. As of now, my main focus is on loss mitigation (stops) if my analysis looks to be wrong & the metals & miners look like they might go much lower. The a break of the recently highlighted support levels on GLD & SLV would most certainly be bearish. Targets TBD later, for now just watching the price action in gold & silver.

Q: AUY appears to be breaking out. What are your target(s)?

A: Thanks for asking as you just made me realized that I never updated my stockcharts.com chart on AUY from the Live Charts page. I just updated that chart which you can view in the link below or via the Live Charts page. These are the same target levels that were posted on the April 16th entry for the trade, which I still think are valid. I plan to add some suggested sell (price) levels but for now, the horizontal lines mark the resistance levels for the targets.

http://rightsideofthechart.com/auy-yamana-gold-long-entry-setup/

http://stockcharts.com/h-sc/ui?s=_AUY&p=D&yr=2&mn=0&dy=0&id=p66226670755&a=329711616

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