One Step At A Time

I am seeing step by step progress in the areas that we discussed in the weekend report, so I am going to go right there.

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This was my weekly Oil chart

And we discussed that many Oil / Energy stocks were setting up bullishly.  Many are a buy. The next step was to look for some continued follow though in Oil.  Monday helped.   It is only day 3 of a new daily cycle and most likely an ICL.  This next run should last for weeks and months, so I want exposure to the types of gains that will come in some of these energy stocks . When I called the lows in February, Oil & Energy stocks made great gains.

I mentioned in my report that I already started buying some stocks and showed their charts and the reason why I like them.  I also added this morning and put that info in the comments / chat section.    I need to explain that some will just go up day after day, others will pop and drop back, maybe back testing a support or break out area.   I DO NOT ALWAYS KNOW WHICH WILL DO THIS,  but if you enter a starter position, at least you can have some exposure if it does run away.   These cycles can last for months, you are still getting in at the bottom. In my past reports I mentioned that some have released earnings,  so you can look for those. If you are looking at energy stocks from my Thursday report and they have been up for 3 or 4 days,  you may want to be patient and wait for a pull back or start small and add as you go along.

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I will cover more on this after I discuss Gold and GDX

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GOLD – Gold dropped a bit more, but held support. Consolidation at this point, as I mentioned in last weeks report. The good news is that…

GDX –  Many Miners were in the green, and could possibly be leading the metals. GDX put in a mini reversal on day 10.

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Now I’m going to go back and point out a couple of ideas about Oil or Energy picks that I have posted.  Some MIGHT run up day after day out of the lows, others may pop and drop and work their way higher.

I am asked, ” Is it too late to enter an energy trade now now?” My broad answer is , ” No it’s not too late, we have weeks or months of upside.  I expect some of these to move 100% or more.”  Could you enter and see a pull back?  Yes,but I can’t say when or which stocks.   I know that this question did NOT apply to the great majority of my readers, but maybe we can all benefit from the following review. 

I posted this chart, and expect it to move higher for several weeks.  I said that this could double, but look at it.  It could even triple over time.  It moved above $5.oo today. I have an arrow pointing at a possible $16 target over time. Where should you buy this? Anywhere here if you can ride the wiggles.  If you cannot ride a pullback IF one occurs, do not buy until it pulls back. In January it went sideways for weeks, but eventually more than tripled.

I posted this and it could double.  Where should you buy it? Either start a position now and add on the next pull back, wherever that may be, or just wait for the run to exhaust and buy the next pull back.

ERF –  I even mentioned that 

 1. It did not sell off the whole time oil did.  

2. It could easily double ( or triple).

So is it too late to buy? Look at the possible downside on this. When oil was selling off, it held up above $5 most of the time, it is not likely to drop there while Oil rallies.

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SOOOOOOOO,   Lets look at an observation that I had.

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Some stocks ran up for a couple of days, and today ran up another 15% , but then reversed lower into the close.  What about these?  Any idea why?  Is that a buying opportunity or should you be nervous? AREX OAS, & DNR surged to mention a few and then gave up their day gains.  Why? Is this bad?

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AREX – Reversal by the end of the day. “Oil was Green, why is AREX dropping?  Is this bad?”  I will answer in a moment.

DNR –   ” Why are these reversing?”  ” Is this bad news?”  “Oil was up, why did this drop? OAS did this too.”

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Lets take a big picture look at AREX and DNR –

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AREX WKLY – Oh it didn’t even clear the 10 weekly MA yet.  I believe it will, but this is often resistance if it didn’t act as support. It may even break back above it by the end of this week, we do not know. It remains a bullish break out from the downtrend so far.

DNR WKLY –  SAME STORY AS AREX and these 2 are not the only ones. Resistance after a run of $2.50 to $3.50.

I even mentioned this in my weekend report with this chart.  OAS ran up to $9.55 Monday and pulled back to $8.90.

So if your energy stocks sell off soon, get a bigger picture view.  You may want to add on the dip. If you dont have any positions, you also could add on the dip for a starter position.  Nothing has changed since the weekend report ( or the  Thursday and Friday reports, except that Oil has taken the steps forward to become even more bullish). I continue to like Precious Metals, but they were showing signs of a bit of weakness, mentioned Thursday night.  Sideways consolidation can correct the problem and we have been seeing that.  Oil and Shippers also still look good, I will be focused a bit more on these areas going forward most likely.

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~ALEX

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I had been wanting to explain my thoughts on NAK last week, since I know that some have entered that trade with me. I drew 4 charts to share last week, but Weakness in precious Metals and strength in Oil,Energy, and shippers kept me from posting them.    I will do that here.

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NAK continued to rocket on Monday. Giraffe neck at this point, but there is a gap below that may fill, since this is rather extended.

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 I drew up these charts last Wednesday night. These were my thoughts on Nak, and they continue to be so.

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NAK 1 – At 65 cents, the expected a-b=c-d could’ve been finishing, but also they do have a tendency to extend.

NAK 2 –  I wanted to point out that it might just bull flag and consolidate, so I was not going to sell it.  TRX did this at $0.90 – $1.00 and then ran to $1.44, so I held on.

NAK #3 – I wanted to point out that NAK WKLY remains quite bullish.  It shows NAK working through resistance, so it could get volatile and that is also why I thought that we may see a bull flag.

NAK #4 –  So after today, we seem to have moved into the yellow resistance area, but re-read what I wrote in the first chart after todays stretch to almost 80 cents.  The gap below Monday could get filled.

So the story of NAK is almost an ‘all or nothing’ story.  The potential is big, their property and what it holds for precious metals is of the outstanding sort, but there is risk that they will not get permits to mine their property yet.

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I wrote this in the comments Monday morning. Click to enlarge.