• ACI - Aug 13 201420140813
  • ANR - Aug 07 201420140807
  • AUY - Aug 12 201420140812
  • CDE - Jun 27 201420140627
  • $CDNX - Apr 03 201420140403
  • CORN - Jul 28 201420140728
  • 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
  • WEAT - Jul 25 201420140725
  • 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.

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

Aug 082014
 

REMX (Rare Earth Metals ETF) will trigger a long entry on a break above 37.80, which is the top of this potentially powerful basing pattern. Price targets are T1 at 46.55, T2 at 57.25 & T3 at 73.95 with a suggested stop on a close below 33.94 (the bottom of the base which is defined the trading range that REMX has been confined since mid-December).  Rare Earth stocks have been on a roller-coaster ride over the past five years, largely due to price manipulation from China (by far the largest producer of rare earth metals, producing a whopping 95% of the world’s rare earth supplies in 2010). I’ve included a chart of the STOXX Global Rare Earth Index to illustrate the roughly 90% plunge in rare earth prices since the 2011 peak.     click here the view the live, annotated chart of REMX

 

Although there are a few individual rare earth companies that trade on US exchanges (MCP, TROX, RTI, TC, & GMO… all which are components of REMX as well as a few others like AVL, QRM, & REE), the majority of the REMX holdings are global companies that trade on various overseas exhanges (click here for a complete listing of the REMX holdings). REMX will be added as both a typical swing trade as well as a long-term trade idea as I am looking for a likely primary trend reversal (i.e.- a new bull market), assuming that REMX makes a solid and sustained break above the basing pattern and the charts still look constructive at that time. As such, I would expect this trade to take anywhere from around 9 month to a year or more to reach the final target (a nearly 100% return), assuming that the trade plays out to its full potential.

As with most trade ideas on RSOTC, multiple price targets are used to accommodate various trading styles and time frames. Price targets, including the three targets on this trade, are placed at levels where I believe the odds of a decent reaction (pullback and/or consolidation) is likely. Some traders might opt to book partial or full profits at any of the initial targets while more active traders might chose to micro-manage a trade (e.g.- close the long position on the initial tag of the target, possibly reversing the trade or a quick pullback short trade, assuming the charts confirm, then once again going long on either the pullback or a solid break above the target level). Also keep in mind that in order to minimize the chances of just missing a fill on a closing trade, the suggested target levels are set somewhat below the actual resistance levels (the dashed horizontal lines).

Aug 072014
 

ANR (Alpha Natural Resources) is one of several long-side trade ideas currently on my watchlist that are showing some bullish developments on both the daily & weekly time frames. With many of the coal stock firmly entrenched in a bear market, these should be considered counter-trend, fairly aggressive trades at this time. For those who may have an interest in the coal stocks, to help adjust position sizing for each trade idea in order to account for the total target exposure to the sector, I currently have six coal stocks on my watchlist that are at or close to triggering an entry that may also be added as Trade Setups and/or Active Trades soon. In addition to the potentially bullish developments on those individual coal stocks, the DJ US Coal Index may be forming a right shoulder of an Inverse Head & Shoulders bottoming pattern following a divergent low at the formation of the head.

ANR will be added as long entry here around 3.60 following yesterday’s breakout on average volume. Suggested stops for those targeting T1 (4.08) would be below 3.40 while longer-term traders targeting T2 or higher (additional upside targets likely to be added) might consider a stop below 3.10 as well as considering a scale-in strategy to allow for a possible backtest of the downtrend line. The last trade on ANR was entered on a break of this downtrend & hit T2 for a 34% on Nov 4th. ANR is once again being added as both a typical swing trade (Active Long) and a Long-Term Trade idea on this breakout. However, longer-term & more conservative swing traders might wait for a solid weekly close (end of day Friday) before establishing a position.     click here to view the live daily chart of ANR     click here to view the live weekly chart of ANR     click here to view the live weekly chart of the DJ US Coal Index

 

Aug 062014
 
GLD 60 minute Aug 6th

GLD 60 minute Aug 6th

GLD made a solid gap higher at the open today, breaking above the wedge and most likely kicking off the next leg higher in gold. Although my recent focus with GLD has been on the intraday charts (60 & 120 minute), that was merely to time my re-entry back into the trading positions in the metals & miners that I booked profits on in late June. Therefore, my focus will now turn back primarily to the daily charts, watching for a break of the July 10th reaction high as the next bullish event for GLD. SLV also made a nice gap up today but has quite a bit more work to do from a technical perspective as it still has yet to take out the top of the June 19th gap (defined as S1 on my previous 60 & 120 minute charts).

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