March 3 Trade Ideas

Trading has been amazing, and there are still some set ups that we can examine.  Lets get to it…

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WTIC – Starting with OIL, this looks set up to pop.    I pointed out  a possible bottom in oil a couple of weeks ago , and I mentioned that when Oil broke to new lows, some Oil  stocks like WTI had higher lows and held up nicely.

Now look at this …

Lets examine different BASES and how they can play out.  Oil is forming a base. Long time readers know that I love bases.

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TCK –  I love this type of Base below the purple line. Its like an inverse H&S. Notice that this front-runner ran swiftly above this base. I point this out because this base is similar to many Commodity stocks and energy stocks now. Also note – Not straight up, but explosive. 

So lets look at Inverse H&S bases.

SXC pointed out Feb 22.  $4 after already running from $2.

SXC – Now still running and at $5.56. This is to show that a nice 20% POP off of the lows does not make these overextended. 

AKS – This is a large base and an inverse H&S breaking out. This reminds me of ABX & NEM.

Do you remember how much I loved  ABX & NEM breaking from these large bases? Even though NEM had run up from $16 to $20, it was only starting because of that base.

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My Point?  When those large bases break out, they can really run!

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Vale started as a small flat base, pointed out here at $2.32.

VALE has now formed an Inverse H&S base pattern in a jagged run higher.  It still  looks to have more upside, as it is just breaking higher. Actually many of these commodity stocks are just exploding upside.

ZEUS is another steel stock with an inverse H&S Base.  When a stock like this is in the middle of a move, it is hard to tell if it will just run up to former highs  ($20) or stall & consolidate some more. Some buy the break out, but if the whole sector is bursting higher, why not buy it early if possible.  ZEUS is breaking out now. This is another long base that could lead to a strong run higher. 

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I also mention this because some ENERGY stocks are now showing the same type of bases.

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WPX –  It popped 13% today, but may just be starting. It also has a higher low like WTI, when Oil was selling off, it held up. UNFORTUNATELY, Look at those price swings!  It looks like a buy here with a stop below $4??  🙁

ERF – This also has a nice set up and could be bought in this area.  The problem with energy stocks is the large swings. You could be stopped out 50cents lower and then it takes off.

Speaking of flat bases, this is hard to recommend, but I do think it is going to take off higher.

REXX –

REXX –  Zooming in, up 35% and breaks the 50sma.

Feb 29 – X– This was one of those long flat bases with several Pops too.

Explosive , this is X 2 days later. Remember that flat base too.

For those that dont like stocks too low priced-

MRO – Another base with good divergence . This could break above the 50sma and run to $14. 

If you like TECH STOCKS, guess what else has an Inverse H&S?    This looks like a buy to me, pinched between the 10 & 50sma.  A-B=C-D?

GPRO – Right at the 50sma

I am starting to see some TECH STOCKS set up nicely, and that doesn’t always happen at Bear Mkt Rallies, so I am keeping an eye on this move higher in the markets.  If they run, set up, and run again…we have to consider recovery type action.   One step at a time works very well to keep one from Bias. Either way, I love that commodities are exploding at the same time.

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SPX –  This does have a bearish rising wedge.  I have to expect the markets to drop and we’ll have to see how that drop plays out. If this shoots straight up, it would change into a channel, but that seldom happens. Jobs Report Friday could cause a sell off.

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SO above are some good trade ideas.  I like the Precious Metals, Commodities like steel, aluminum, copper, etc, and now Energy. Energy stocks may be the next X, CLF, CENX, ABX, NEM, DRD, HMY, etc type moves.  These areas  look to be setting up in their own explosive bases.  If you have your list of energy stocks, you can look for these types of set ups to form.  I do see many more than I can put in this report.

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GOLD – SO Bullish looking.

  I used this chart in Wednesdays report for Gold. I showed a possible drop & then a run higher, even though  I said that Gold looked so Bullish and perfect.  Why did I say it could drop if I think it looks so bullish?

1. If I believed in ‘painting a chart’ with algorithms , I would paint a perfect bull flag and drop it down to shake out longs and encourage shorts, then I would go higher.

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2. Below is an actual  set of charts of a Miner showing that anything can happen no matter how bullish the flag looks. 

I just wanted us to be aware that Anything can happen in these markets. Stay Frosty, use stops, but dont be too afraid to trade or you may miss some nice moves in this environment, just keep positions reasonable size-wise.

Have a great day- trading or riding your current positions.

~ALEX

One reminder: Energy Stocks move quickly in both directions!  It can be difficult  Risk/Reward wise when a $4 stock easily moves 50 cents lower and then takes off $2 higher. What to do? Start with smaller positions.  It was the same with X, AKS, CLF, VALE, etc.  You got an initial buy, then you could add on a dip,  then again as it forms an uptrend or inverse H&S, etc. you could add again.     By the time  it exploded out of the base, you were well positioned.  No need to go in too heavy and risk losing a good chunk or your funds getting stopped out on a scary drop, only to see it take off higher. 🙂