Running

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Some of the ‘set ups’ mentioned last week are running now, other stocks that ran recently have pulled back and may be currently setting up to make another run higher.  Lets discuss this after our market review. Something interesting may be happening there too.

From yesterdays report, we saw this in a few sectors

IWM 10-13

Now we are getting a little follow through to the downside

IWM 10-14

This caught my eye however…

They say that semiconductor sector often leads the markets. The Sox (Semi sector) does look to be recovering.

SOX OCT 14

Lets peak at semiconductor stocks

CY 10-14

FCS 10-14

SMTC

SO if these semiconductor stocks ( And others) are perking up, we should be alert to the idea that the Tech sector may start recovering from its sell off. These stocks actually look like they are breaking from the downtrend and receiving some love.  They may become “buy the pullback” candidates for those that like trading the tech sector. 

The USD  broke down further as expected.  As mentioned yesterday,  we are now seeing short term lower highs and lower lows. Now the 50sma is (Death cross) dipping below the 200sma.  We often get a “Test” Bounce from this condition soon and then further downside should occur later. 

USD 10-14

$WTIC –  For the past several  days I have expected this tag of the 200sma and then a drop. Almost there,  maybe the $45 area?  Keep your eyes on Oil / Energy stocks during this pullback.  If Oil runs higher again, they should make their next run higher too. 

WTIC 10-14

The above chart shows Oil dipping to the $44.75 area,  but  this is OIL pre-market .  $45.50 looks like the low if we drop further, unless it just rides down to the apex.  Remember the wedges  🙂

OIL 2

 

Is NATGAS bottoming? That looks like a possible shakeout. If you can handle bottom fishing, this is a low risk area, your stop is below support.  ( Some buy UNG, UGAZ, etc).  XCO is a NATGAS  stock …

NATGAS 10-14

XCO – Possible support here,  or that doji may be a 1/2 way point.  Watch for a drop to the blue trend line / 50sma. 

XCO 10-14

 

GOLD – Gold broke above the 200sma today.  

GOLD 10-14

SILVER – Yesterday I pointed out that Silver was coiling under the 200sma with a bull flag, and it was only day 8.  ( I wrote  GOLD on the chart –  this is obviously SILVER)

SILVER 10-13

Wednesday Silver is breaking out and the Silver stocks did very nicely. If this was day 8, then I would expect Silver to be able to get up to $17.50  if it can remain above the 200sma, but it may not be a straight up move.

SILVER 10-14

GDX –   Very nice 6.5% pop today.  Will we get a pullback at the 200sma?  Possibly. It may just be a sideways bull flag like Silver just did, but to get a 1-2-3-4-5 move,  we could expect a pause at the 200sma. 

GDX 10-14

  Review: We had a bearish engulfing candle 2 days ago, so most traders would be cautious at that point.  I admit that I was, and I sold the NUGT that I bought when they did their reverse split. I held on to my regular Miners in the event of upside.   I used this chart to point out that we also had a bearish engulfing in Januarys run higher, so I thought that we still might continued higher after a tag of the 10sma  (Magenta arrows)…

GDX 10-12

I have had a few traders ask me , “What if I want to buy now? Am I too late?”    My answer to that is that the low risk entries are rare at this point in a run.  We see stochastics are  oversold, RSI are high, and so on,  so even though this can run higher, entry is tricky/ risky now.  It should be stated that under these conditions, we can see an  embedded run higher where those indicators just remained pinned and it can be very bullish. 

However, for a trader,  I will show what I look at to find stocks that may still move higher.  They could have been scooped up today on the break higher, but they may also offer an entry if they pull back Thursday.  In time, they can play catch up, even if Gold & Silver go sideways. The problem is – Where do you put your stop? You must decide what you are willing to risk if we get a pullback sooner than later.

AG  –  I own this and I dont really know if this is still wave 3 continuing, or putting in 5 now, but a run to the 200sma is possible and that is 20% higher. Not a bad trade. 

AG 10-14

I pointed out SA as a buy with this chart

SA 9-30

Today it looks like it may complete that move higher to $9. It also may be a giant inverse H&S.

SA 10-14

EGO is at a break out point. Was that a mini Cup& Handle?

EGO 10-14

 

CDE  just never joined the run, but has formed a constructive base.  IF IF IF it decides too, this is a low risk entry when it gets above the 50sma.

CDE 10-14

 

BAA – I hate to even bring this up, but GSS looked excellent today and BAA ‘Might’ Be starting to recover. It has held above the 50sma for 3 days, but the 200sma is right over head.  (Watch list worthy?)

BAA 10-14

 

Others that I think may be ready now, since they are breaking from bases could be  SAND, SA, NG, IAG.   Maybe XRA, HMY, PAAS, BTG and look at…

ABX –  I had charts of GG, ABX, NEM posted recently, showing their bullish set ups and saying that THAT was the reason that GDX could go higher. Those are main GDX components.

ABX when I pointed it out Oct 2 – Bullish Descending Wedge

ABX 10-2

OCT 5

ABX 10-5

OCT 14

ABX 10-14

 

Take a look at GPL and HL.  The SILVER stocks are really moving nicely. Traders could find one just breaking out of consolidation ( like AG? )  and just enter with a stop and take a chance? As always,  the risk is chasing & getting caught in a sell off sooner than later.

 

Think about this :  Miners & Energy ran higher in Aug – Oct .  Many really wanted a pull back in Miners before the next leg back. Many are now saying,  “I would have bought that pullback.”  Well,  Oil & Energy stocks are pulling back right now.  Are we looking at them to buy the pull back? They may be setting up for another run higher, so lets take  a look at a few for ideas of what to look for.

CRK  #1 –  Everyone wanted to own this from $1 to $4. 00.  Is it too expensive at $2.75?

CRK 1 oct 14

 

CRK #2 – The potential is enormous if it remains in recovery mode. $1 to $4 looks like nothing on this chart.

CRK 2 oct 14

EXXI – Nice run…Bull Flag?  Dont buy the flag, buy a break out.

EXXI 10-14

ANW  – This support may or may not hold, but I’m watching it.  It may form an inverse H&S too.

ANW

 

CJES – This base doesn’t look like much, but look closer. CJES was up over 70% in 5 days.  Huge potential again,  if this recovery has follow through.

CJES 10-14

 

Interesting moves in the Semiconductors, Metals, and Energy.  Pick your poison and look for pull backs.   You may find   low risk entries  that can form when they find support and then reverse higher to begin the next leg up.   We also know that everything that goes up does pullback or go sideways later. A DCL will come later in time and waiting for that can be safer, but I’m not so sure that the next daily cycle will be as strong as the one we are seeing.   Energy may be setting up right now. 🙂  Have a great day.

 

~ALEX

81 replies
  1. Matt C
    Matt C says:

    Great report Alex as usual! Things R rosy on the ASX down under, plenty of beaten down commodity stocks with long flat bases showing some life. Here’s to extra spending money for Christmas hey!
    Matt

    • chartfreak1
      chartfreak1 says:

      Hey MATT – Nice to hear from you again, hope all is well?

      I have been scouting out some bases too, hoping for an upside run. Some nice pullbacks in the US markets in commodities so far .

      CENX sits right on support here, for example. (Refresh) . These offer low risk entry with a reversal higher.

      • Matt C
        Matt C says:

        Mate – summer weather is here things are great! Plenty of camping, kayaking 4WD-ing wakeboarding all the fun stuff.
        Also fun was the tag of that area you said to watch for in WTIC and the nice long tail left behind 🙂 (attached). To a tee mate, Really like the set up in oil right now. sitting pretty on the right side of the 50 DMA as well.
        Thanks for all your hard work

  2. Bill
    Bill says:

    Alex, I’m confused on the cycles, Are we on the 2nd daily cycle in GDX and GOLD, or the third? You said day 8 for silver, is gold day 11?

    • chartfreak1
      chartfreak1 says:

      Hey Bill, It’s tricky as I mentioned, because triangle patterns formed and can make the cycle count difficult to monitor.

      Looking at the charts we see that : GOLD bottomed with it’s lowest low in July. Silver put in its lowest low in August. Miners had their lowest low in September, so you would assume that the 3 are not in the same cycle count. They bottomed months apart.

      With the above information, I tried to make it pretty clear in yesterdays report where each cycle count is. You may want to go back and see it explained with charts there again. It’s easier with those charts than me trying to explain it here again.

  3. chartfreak1
    chartfreak1 says:

    Very strong volume on GST – looks like it will break from this base ( disclaimer: I pointed it out as it moved above the 50sma and I do own it, it is energy) .

    It has as much volume 20 minutes into the day as it had all day yesterday or Tuesday.

  4. chartfreak1
    chartfreak1 says:

    BAA ( From the report, chart above) Ran right to the 200sma. Has pretty strong volume in the first 1/2 hr, it may be trying to break through after putting together a 1 month base.

    On the chart, yesterday BAA looked to have increasing volume with 1.9 million for the day. Today BAA has 1 million in the first 1/2 hr. HHMMM

    • chartfreak1
      chartfreak1 says:

      I like SGY for the huge pop & run that it did, but right here it is kind of in no mans land. This is a tough one for me.

      I can see some support here on the lft side, but the 50sma is still a bit lower and it is below the 10 & 20sma, so ‘support’ is questionable. Yesterday it lost the 20sma and regained. Today it lost it, but looks like it wants to regain it.

      I cant say its ‘low risk’, there is a small risk that it will drop further, but it also may meander sideways to the 50sm and stabilize here too. Its rather unclear.

  6. SonOfGud
    SonOfGud says:

    what happened to UNG/UGAZ?..
    was just considering a buy , when it got slammed.
    phewee that was close

  7. Jay
    Jay says:

    Hi Alex,

    Many Thanks yet again for this great service.

    CDE :

    The big problem for Coeur, however, is costs. To be fair, it’s been working hard to reduce how much it has to spend to get an ounce of metal out of the ground, but it has a long way to go. For example, the company reports all in sustaining costs on a silver equivalent basis. At the end of the second quarter it pegged its all in costs at about $16.60 per ounce of silver. On the one hand that was the lowest level since the company started reporting all in sustaining costs in 2013, on the other hand the spot price for silver is currently around $14.50 an ounce. See the problem?

    Needless to say, Coeur is losing money right now. But more important, the price of silver and gold have an exaggerated impact on the company’s business and investors’ perceptions of its prospects. The shares of this miner are simply languishing along with the prices of silver and gold.

    • chartfreak1
      chartfreak1 says:

      Hi Jay,

      Thanks. I do understand the Fundamentals are weak for CDE, as they are in many of these Miners. From a charting viewpoint, CDE lagging doesn’t make sense unless there is something else there. Many of these base out & set up for a run higher with forward looking reasons. So when Silver goes from $14 to $16 as it just has, many Miners will just take off as a result of short covering & then buying. Last November CDE went from $3.50 to $7.00 and it had weak fundamentals then too, with Silver trading around $15- $16+.

      So we just saw GPL all of a sudden up 100% from Summer lows. AXU is up almost 100% . CDE is up 30% from summer lows, but remains inside of the base. So far the set up is a good base, I am thinking that it will still play catch up, so it’s on my watchlist. If it breaks higher with volume, I’m in 🙂

      Thx again for your input.

    • Bill
      Bill says:

      Jay, Good to know. I remember AUY being one of the lowest cost to produce gold miners. Does anyone have a list?

    • Cason
      Cason says:

      Right, but IF (and only IF) silver were to eventually move out of the bear. All in is $16.60. Silver moves to $18.60 – that’s $2/oz. Silver then moves to $20.60 – that’s just over 10% for silver. But for CDE that goes from $2 to $4, which is double. Just saying. For the future.

  10. chartfreak1
    chartfreak1 says:

    BBG is a beautiful low risk set up. It hit $4.36 today, its at $4.84. Nice reversal off of the 50sma. I got it at $4.63

    It moves like a 3xETF- so not for the weary.

  14. Alan
    Alan says:

    Alex, I was wondering how low CENX would have to drop for the setup to have failed. In entered yesterday at 5.60 and want to set a stop at a place that makes sense but is not too tight. Thanks for your insights.

      • Alan
        Alan says:

        Thanks for the feedback. I am actually looking for price to hold the 50 dma but want to give it room to go under a bit as it is doing right now. Just not sure how low is a hard break of the 50 dma. I suck at charting.

        • chartfreak1
          chartfreak1 says:

          Looking at AREX, AKS, and some others, I honestly think the selling is going below the 50sma and back just to shake out people. It’s not you being bad at charting, its the markets being bad at playing nice.

      • chartfreak1
        chartfreak1 says:

        Personally I dont like to give back more than 10% , and I only do that if I really have strong conviction on what I am holding.

        CENX does look good. $5.00 would be 10% from his buy, but I am thinking that it has pulled back 61% already and should stay near the 50sma reasonably.

        • Cason
          Cason says:

          I don’t like giving back more than 10% (no one does) but some of these are moving 10-12% per day so the ‘wiggles’ are awfully darn big!

    • chartfreak1
      chartfreak1 says:

      Hi Alan,

      Sorry for the delayed answer, I was away.

      That is a tough one, because I dont want it to be so loose for you that you take a lot of drawdown and THEN get stopped out, but – this can go under the 50sma and recover. I say that because I am seeing many good looking stocks do that. I think they are stopping people out and then buying it back.

      Take a look at AKS and use your 50sma. The past 4 days price has dropped a good amt below the 50sma and then recovers and today looks like the real reversal for a move higher. Its like it has been purged of buyers buying at the 50sma for 3 days with shake outs and now it’s heading higher.

      So I am seeing that in some Energy stocks too. AREX has almost stopped me out 2x, but I switched to a mental stop , because I could watch it. Volume is light so I hold on.

      My answer, My stop would be about $5.20 & unfortunately thats a 6% loss if you get hit. I’d have to buy back in if it reverses and closes above the 50sma again. I think CENX will be fine, but you have to do what you can to protect yourself. If you get back in above the 50sma, you will probably make your 6% loss back in spades. It can run above $8.

      • Cason
        Cason says:

        CF, thanks for sharing the advice here. I am using mental stops on a few – example BAS today – lost the 20-day SMA then reversed and finished up at 10-day. If I had a close stop would have stopped out this morning and then been out the reversal. Though I do have to say I was sweating a bit this morning. Decided to just turn it off and concentrate on work. Phew! Starting to learn patience (but it has NOT been easy).

  15. chartfreak1
    chartfreak1 says:

    I mentioned GST this morning. It popped and dropped all morning. It now looks like a solid break out . If this runs to the 200sma, it is still almost another 45% from here.
    .refresh
    .

      • chartfreak1
        chartfreak1 says:

        It’s so difficult because it could drop tomorrow. I like to only recommend lower risk of drop after entry.

        If I was buying it and thinking of adding a good amt, I’d try a starter position and IF it drops tomorrow , I’d add more. I do think this is a legit break out with good volume.

  16. Ken
    Ken says:

    Oil Road Map. IMHO. 🙂
    If USO breaks thick blue 2 my count is wrong.
    Long USO calls and a basket of junior oil stocks with very low debt. fwiw. 🙂

  17. chartfreak1
    chartfreak1 says:

    WTI , CJES , QEP – etc are a good looking group of set ups here ( SO many Energy stocks are buys right now, but I dont have time to charts them and alert. Tomorrow will be an energy report).

    Look at KEG, BBG, QEP, HAL,

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