Profit Hunting

On paper last week was fairly decent.

Leadership seems to be in tech/entertainment stocks and financials.  Nobody is interested in companies that make things anymore.

Couple of charts to have a look at;

XOM breakout, expansion on high volume

XOM breakout, expansion on high volume

XOM looking good on a high volume breakout over double-top resistance.  Expansion days on the breakout were consecutive at >1.5ATR which is strong.

Looking for 3-5 days of narrow-range consolidation on lighter volume for entry signal here.  Alternatively, a more longer term move back to $50 for entry, which would provide a better risk reward ratio with stop placement at $49.25

This chart above is almost identical to the MGA chart I posted in March last year.  Here’s what eventually happened there:

MGA post breakout bull-flag behaviour

MGA post breakout bull-flag behaviour

These trades are good setups – the hard part is being able to manage the downside risk and time the entry.

Stop placement when trading flag consolidation over a period of 2-3 weeks can be tricky, so you’d be looking for an exact entry signal on an intra-day basis here.

Falling knife

AMD falling knife

Posting this for any long term value traders out there.

Risk reward is immense right now, but this is ticking down at all time-lows (>20 years) for the third time in 7 years.  The downside risk is about 15 cents, but I couldn’t really sugest a long here.

I’d be more interested in shorting the first retest of the breakdown of Fridays close.

WPX daily, breaking down

WPX daily, breaking down

An actionable short, similar to the setup in AMD but in WPX right now.

This is breaking a good base a key level ($10), forced by some extremely high participation.

A short on a move back to 10 offers an extremely attractive and low risk trade – if you can get it.

However, judging by the intra-day chart of MPX, this ship may have already sailed.  Short-term ascending wedge back in to the breakdown area.  Great trade if you can catch them, but this stock would have had to have been on your radar before it was near $10.

Has WPX already given the best risk/reward short?

Has WPX already given the best risk/reward short?

Profit Hunting

Not too many good looking medium/short term trades at the moment.

A few longer term charts caught my eye though;

ABX daily 10/07

ABX daily 10/07

Gold isn’t having a good time just now, and ABX is at 20 year lows just now, having just cracked down from a few long term support levels in recent months.

Medium term triple bottom support here at the key psychological $10 level may mean some bottom fishers might start stepping in soon.

However..

GLD monthly

GLD monthly

GLD still showing some signs of technical weakness, with the next support at 100.  100 on GLD (1000 on GC contract) would be a better level to step in to the likes of ABX, GOLD and GG.

GOLD between 55-60 and GGs current descending wedge formations offer a little more downside protection compared to the fresh air on ABX.

INTC monthly

INTC monthly

Intel stepping in to some strong support levels just now but with some heavy medium term weakness in the form of a year-long reversal formation (head and shoulders) on the daily.

I’m not sure how to interpret the thin relative volume at these levels.

There will be some good trades coming up here soon, since this stock has some good levels to work from.

Personally, I’d accumulate at 12 for extreme long term holds.  But that price is very very far away for a stock like Intel.

Profit Hunting

Not your average Profit Hunting post.  I checked the archives of my blog and it turns out it is officially six years old.  Six years is a long time and I can still remember the early days of my trading career pretty well!

Coinciding with the birthday, I also opened a document I wrote in Drive which outlined a list of articles I was going to write to start a site focused on trader education.  Here’s a time stamp which outlines how much of a procrastinator I have been lately!

Yikes, a year.

Yikes, a year.

Going in to this sites seventh year (!) I am planning to pull my finger out and crack on with it.  Even if it is just one article a week, progress is progress.

Happy birthdays aside, lets check some trade ideas and some technical lessons;

MGA breakout and continuation example

MGA breakout and continuation example

Potential reversal in COST

Potential reversal in COST

Just missed FCX this week!

Just missed FCX this week!

Gold recovery, options ahead

Gold recovery, options ahead

CLF continues a melt-down

CLF continues a melt-down

WLT is a short term traders vehicle right now

WLT is a short term traders vehicle right now

Keep an eye on AGO

Keep an eye on AGO

 

 

Profit Hunting

Puckle charts to have a look at.  Not a massive amount of good technicals about – a lot of stocks seem to have made key moves over the past fortnight so this week there is a lot of ‘late to the party’ setups.

AET, same as GM - no notation needed

AET, same as GM – no notation needed

GE make or break

GE make or break

GM trend & lateral junction

GM trend & lateral junction

Longer term consolidation phase on JNJ

Longer term consolidation phase on JNJ

Potential breakdown on MDT

Potential breakdown on MDT

In other news, I’m waiting for Ghost to get to version 1.0 before swapping the site from WordPress.  TSLR & WP seems clunky and outdated now and I’m looking to start with a clean slate.

Long time no tunes too!

Profit Hunting

As a technical trader, I love how a few sessions can turn an average list of stocks in to a bunch of great trade set-ups.  Lots of good techicals out there this week which serves as a reminder that patience is a virtue when it comes to trading.

You’ll notice the market going through spells like this a dozen or so times a year.  These spells offer the best risk reward ratios as stocks move above resistance or towards established bases on good volume.

These periods are where most technicians make the most of their coin.

I barely made it beyond tickers beginning with ‘B’ before I had enough content for a profit hunting post.  RVBD has been on weekly-watch for a few weeks.

ABT keen for a breakout to fresh highs

ABT keen for a breakout to fresh highs

Strong trend on AET as it too looks for new highs

Strong trend on AET as it too looks for new highs

Interesting technicals on BEN, could go either way

Interesting technicals on BEN, could go either way

Long term reversal playing out in RVBD

Long term reversal playing out in RVBD

ACAS, MRO and COV are 3 more stocks with charts similar to ABT & AET.

My gut shot is bullish, however with few of these charts confirming their breakouts (DOW a prime example) I can see how bears would be scaling in here.

These price levels as of Thursday pre-market offer excellent risk/reward ratios for both longs and shorts, so it will be interesting to see who wins heading in to next week.

Happy trading.

Profit Hunting

Less actual trades, more interesting technical formations today.

First off, a pretty nice head and shoulders reversal formation which is beginning to follow through on SU.  Good example for technical purists out there.

SU daily - bearish head and shoulders reversal formation

SU daily – bearish head and shoulders reversal formation

Next up a look at what appears to be a meltdown in progress.  TC is down in the low single figures now, and formations on both the short/medium charts and long (weekly) time frame show how this has happened.

I imagine there’ll be short covering and bottom fishing at these levels.  I for one would not be opening any longs though, the stock looks pretty ill.

TC daily chart - clean reversal and continuation formations

TC daily chart – clean reversal and continuation formations

TC weekly - it's a long way down.  Good technicals following through

TC weekly – it’s a long way down. Good technicals following through

Profit Hunting

Its been a long time.

Not too many charts catching my eye out there.  Most are either churning upwards without a value buying area or chopping sideways.  7 charts caught my eye, the majority of them are longer term plays.

Long term

Exxon at major resistance, breakout looming?

Exxon at major resistance, breakout looming?

VVUS breaking down after long consolidation

VVUS breaking down after long consolidation

SWKS trying to break a triangle, will it hold?

SWKS trying to break a triangle, will it hold?

POT weighing heavy at these levels, potentially break down soon

POT weighing heavy at these levels, potentially break down soon

Short/Medium term swing candidates

Potential breakout on PNC

Potential breakout on PNC

C forming a nice ascending triangle formation

C forming a nice ascending triangle formation

Crunch time for SHLD

Crunch time for SHLD

PNC and C are my favourites here as they offer the cleanest trades.  I am also tracking TCK with interest.  A few of the gold stocks are reaching longer term bases too – but it may be better trading GLD or futures at this point in time.

TSLR Weekender

Heaps of action for the upcoming week.

Market Sentiment

There was a heavy and convincing sell off on Friday as the main indices tailed away from overhead resistance.  The tech sector has been hit hardest, with GOOG and AAPL feeling particularly vulnerable.  XLK has not had a good time of things lately, with earnings across the sector largely disappointing thus far.

ES Daily

ES and SPY are at the lows of their rectangular consolidation range.  We are exactly where we were last weekend, with the contract closing out the week at the key 1420 area.

Last week I was looking for the upside before a reversal.  This week, although we are at the same level, my sentiment has a bearish skew.  I will be watching 1420 with interest as we head in to next week.

NQ Daily

The Nasdaq was out of sorts last week.  Having failed relative lateral the week before, it has continued to sell from the technical topping formation.  It now has three levels of overhead resistance compared to the singular levels in both the Dow and 500.

However, it closed the week a little north of its next major support area at 2660.  Even with the nature of Fridays distribution, I am anticipating a very small reflex bounce back up  early in the next week.

I do not expect a great deal of lateral movement until Thursday, when AAPL releases earnings.  Given where the markets are currently trading, I am expecting the move from this announcement to provide the medium term directional bias.

Part of me feels the market is being driven down ahead of good earnings in AAPL.  This allows weaker hands to get shaken out and provides a chance for larger players to reduce  their cost basis.  The other part of me thinks that poor AAPL earnings have been priced in, and the numbers may not have such a strong impact on the overall market as I expect.

Dow Futures

The Dow has shown good strength this week and it too closed out Friday at a key support level.  If I were to open up a long right now in any index it would be this contract at this price.

Market internals; past 20 sessions breadth

Before I move on, above is a chart of the NYSE market breadth from the past month.  If you were in any doubt as to the strength of the selling on Friday, check it out compared to the other down days we’ve had lately.  At lunchtime on Friday, breadth was -15:1.

VIX and the VXX ETF

Having based out in the 14s, there was a big volatility expansion at the end of the week as the VIX advanced over 2 percentage points.

This chart is providing the first technical trade setup for next week; long VXX.  There has been a huge increase in volume on the contract which to me reflects a short bias.  I like the wedge formation too.

Although I believe moving averages are a load of tripe/hogwash/shite, this chart offers an interesting insight into how algorithms are positioning themselves around this trade.  After hedging with TZA and FAZ last week, this is the best looking technical hedge out there for me at the moment.

Intermarket & Commodity Analysis

Crude – CL hourly chart

A look now at oil which has had a very volatile few sessions.  There is a lot of rejection at 93 at the moment, and it looks set to continue to the downside on most of the timeframes I’m looking at.

CL is at mid range at the moment, and I’d like it to retest the 93 area for an opportunity to scale in short.  The dollar is setting up for upside this week which may have an impact here.

Gold – GC daily

Gold is looking top-heavy at 1800 and is breaking down a little bit here.  An hourly bear flag also points to continued selling pressure.  I don’t see a great deal of lateral support here until 1675.

I will be looking to short gold this week on any kind of weak bounce.  I would not be a buyer until 1550.

US Dollar – DX daily

Although the short term technical pattern looks like bearish consolidation to me, it looks like USD could catch some upside action this week.  This bounce will not change my long-term outlook, but may provide some nice short to medium term trade options.

80.25/30 is the line in the sand here.  There is a bull flag on the hourly chart here which also points to further advances.

30 Year Bonds – ZB daily

I’ve cast a keen eye on TBT and TLT lately, and now here’s a look at the ZB contract.  To me, it looks to have formed a higher low with a decent (although imperfect) morning star reversal formation.

I’d be looking for long exposure here through TLT with an eye to offload half or close all should this reach 150′.

With bonds and the dollar looking for upside while the main indices are at support, next week should be very interesting from a technical perspective.  Given what I have in front of me, my gut-shot is bearish consolidation throughout Monday-Wednesday, before continuation to the downside on an AAPL miss.

Sector Watch; Refineries

This week, a look at a composite chart of TSO, VLO & WNR

Refiners

These tickers have had a strong 6 months or so and were due a sell off.  I was a little early a few weeks ago with the short forecast.  This week offers a nice and clean continuation formation on the composite as each stock offers similar setups on an individual basis.

I will talk about TSO later, but I don’t see any support levels for quite some time in any of these names.  From a technical viewpoint, the measured move on the flag will bring this chart back in to a demand area.

Profit Hunting

Now, a look at some stock specific plays

ACN prior resistance retest and gap fill long

Short and sweet;  I like ACN at 66 on a gap fill of a previous resistance area.  1 point of risk offers 4:1 upside.  Clean and simple setup in a name that has shown good strength recently.

Marathon Oil daily

Not so much an explicit trade setup, more a “one to watch”.  MRO is about the only oil stock with a clean, non confrontational chart.  I like the recent advances – but I don’t like this evening star pulling back from a prior resistance level.

I feel this may pullback this week before providing a long entry point perhaps in the low 28s.  Although I anticipate some selling, I am not looking to short this – I want the sell off to give my upside bias an entry location.

NUE – Which way?

Closed the week at ascending triangle resistance area.  Also has longer term resistance level a few points ahead.  I like the base should this breakout.

Look for volume and expansion over 41 (confirmed at close).  A possible scenario (Ok.. the one I am planning on) is a high volume breakout above 41 which runs into selling at 43 before pulling back on light volume back into 41 to provide a chance to buy.

I am a fan of charts like these.  A handful of other major steel/iron charts are also trading at key resistance levels having shown great relative strength over recent sessions.  I have also added X to my watchlist for the week ahead.

PCLN

PCLN.  ‘Nuff said.  Did I mention I pulled my 555.55 limit order on Friday?  The low was literally a few pennies below that.

PTEN daily

Another one to keep an eye on.  My bias is bearish given the 2 day rejection from this key 18 level.  I see continued distribution down to 15 – a point I would consider buying.

I will re-evaluate the chart should it close north of 18 on good volume.  Volume has been light lately which is another reason I favour the short here.

Neutrality on TMO

TMO seems to love a reversion to the mean.  This is a truly neutral chart for me and one that will offer a good setup either long or short whenever the market decides where it wants to go.

With clearly defined risk parameters, this is a nice easy setup to scale into on market weakness or strength.  My gut says down here though.

TSO downside

The refineries are in play this week, and here’s a closer look at TSO.  The pattern is obviously very similar to the composite from above, but compare the volume ratios in TSO during this consolidation phase.

With such thin horizontal support levels until 30 here, this looks like an implied short.  I’d be a seller right here.  My stop would be a little loose here (so smaller size) on the entry (~46) but if this does get downside momentum I would be quick to move it to a break-even stop-loss.

VMED weekly

I like the daily on VMED and I’ve been waiting patiently for a long entry here.  It may come soon as I look at this weekly chart.  A slight rejection of this 31 region and a move back to 28 will definitely spark my interest.

A good number of support levels beneath this area provides a good base.

FLIR weekly

Another weekly chart.  FLIR looks set for more selling here.  I do like this long at 18 with a relatively tight stop.  The fact that it is approaching a multi-year support/resistance level within a descending wedge makes me bullish in the longer term.

The above is a log scale chart which makes the downside look more than it is.  Should that trade not work out and get stopped, I would be inclined to set an alert in the 11 region which would also offer a value long.