READY?

Ready for what? For one thing, we are at another Fed Wednesday.  Yes, that’s right, the latest Fed Decision on interest rates is released today, and usually we have to get ready for any possible volatility. This time I dont expect much in the way of a surprise there, but  we may want to start getting  ready for the trades that the charts are setting up for. 

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On April 20th I posted this chart of Oil.  I’ve been bullish on Oil since the Feb Lows, and it still  wanted to go higher. There is a resistance area in blue, but Oil looks like it wants to move to at least the top of that area for now.  I listed many Energy / Oil companies that were set up bullishly. 

 

Last Thursday I showed how Oil would have to work its way through resistance, but was still going higher. You can see last Fridays report for a list of Oil/ Energy stocks that were setting up bullishly.

 

 

OIL is breaking higher and I think it’ll just run to that next resistance level. We are on day 15 of a daily cycle that can run 40+ days, so I am still bullish on Oil & Energy stocks for a while more.

 

These links are to last Thursdays report and the Friday before that. They had quite a few Energy stocks / Charts at the end of them. You may want to check skim it for a couple of Energy charts and see if they may still be valid by set ups. Some have POPPED and Pulled back ready to buy again.  Other trades are still valid.  The list included OAS, MRO, SWN, SN, SM, etc.     The LGCY trade obviously exploded and is a bit more risky at this point, but I still like  BCEI and BTE longer term , for example. 

ENERGY CHARTS Here

ENERGY STOCKS

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BCEI –  For example, this chart was from April 19.  I still like it, but it has run to $3.72 .  If it pulls back, its a buy. On a weekly chart, I still think it could run to $5 quickly and even $9, but earnings are to be released on MAY 9th, so we keep that in mind..

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BCEI –  This is a solid base so far. This chart shows that it  could run back to to $9 over time, IF the company recovers.  Earnings May 9th.

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NATGAS MARCH 28 –  I want to remind you that when NATGAS got to the 50sma, it crawled along under it, building steam to break above it.

NATGAS Currently –  Natgas has reached the 200sma as expected, and now it may crawl around here trying to build steam to break higher. 

 

COMMODITIES ARE SETTING UP AGAIN

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CRB – So the CRB is also just going sideways after breaking above the 50sma, and then dropping back to it as support. I dont know if it can break through here yet or not.,  IF NOT, MAYBE the commodities that we are watching will pull also back a bit more.  IF the FED says that ‘inflation’ is a concern, Buyers may jump into Commodities and push the CRB above the 200sma.

GOLD –  What else can I say about Gold?  🙂  It is due for a pullback, but it has just been consolidating sideways.  Maybe the FED can start a sell off in GOLD finally? This weekly chart actually looks bullish, and so does Silver shown in yesterdays report,  but…

GDX – Miners finally look like they are losing steam here. Look at the MACD divergence.  Unless Miners SURGE higher, they look ready to tag that top line and drop.

 

 

TRADES SETTING UP

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( I apologize if this gets ‘wordy’. I want to explain things clearly)

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THAT SAID –  I want to just focus on our set ups in commodities and Energy.  I have new readers here and I know that spare time is difficult to find, but I’d like to recommend going back to some of my weekend reports when you do have time, and reading them just to know the Big Picture expectations.  Also skim  some Energy charts on the 2 links that I posted above.  Make a check list and look them up for opportunities. I had been saying in January and February that I expect  Precious Metals , Oil and Commodities to BOTTOM and be some of the best trading around %-Wise.  So far, we have seen spectacular gains in these areas.  Peoples accounts have actually doubled and tripled in 4 months!  That is why I want to focus on this area when it looks like the next run higher could be setting up.  I think they are setting up now. 

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Tuesday I saw some very bullish reversals and I mentioned them in the comments / chat section as they occurred. I will start by showing those here.

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AA – The first run higher was roughly $6 to $10. Then we see a consolidation that formed a Bullish pattern called a cup & handle. Mondays dip ‘tested’ the break out and today AA burst higher.   Volume actually closed at 27 million  ( I captured this before the close).   This stock looks ready to go and could easily run 50% or more.

 

CENX – This was April 22.   I was mentioning how this could drop to $7.75 and seem scary , but it is a very bullish set up. It is another Cup & Handle pattern.  These are formed from Buyers supporting each sell off / accumulation.

 

CENX – Tuesday it dropped to almost $7.50 all in one day and reversed higher to $8.50. THAT is bullish action when buyers that big quickly scoop it up on a sell off.   Where does CENX want to go? 

 

CENX could easily double from here.  This just ran from $2 to $9 in 2 months in the first leg higher.  NOTICE THAT IT IS NOT STRAIGHT UP.  It can get bumpy and volatile, but rewarding . If you bought CENX in January at $2, you quadrupled your investment.

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FCX in February  –  Using the chart below, do you remember when we bought the first break out at $4ish and a 2nd entry was above $6?  On this chart it looked like FCX wanted to go to $12- $14  (Octobers highs) eventually.  Maybe higher after that. We are in recovery mode from a beat down in commodities. 

FCX TODAY –    FCX was above $12 only 2 months later. This has formed a small cup & handle in the recent consolidation too. They had their earnings release and look at that drop to the 20sma and then it recovered.  I would say that FCX is a buy in this area, someone with deep pockets stepped in and scooped that sell off up. Big Funds often look for a sell off to buy, to be able to get the amount of shares that they want without driving the price too high.  If you bought this in JANUARY, you tripled your investment in 2 months.  I think that FCX is a ‘buy’.

FCX is a copper and Gold Mining company.  This weekend I said that I thought Copper was setting up to break higher, and Copper stocks were looking good too. 

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COPPER TUESDAY – Copper dropped and bounced off of the 200sma, remaining bullish.

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HBM is a copper / Gold Miner that I have been interested in and accumulating. I posted charts in prior reports, lets look at it again here.

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HBM WKLY – This weekly chart still has the inverted H&S pattern and the volume characteristics are bullish. This weekly chart is showing only Monday & Tuesdays volume. ( Remember that FCX ran from $2 to $12 so far. This looks like it wants to run to $10 eventually).

HBM DAILY –  The daily chart looks like a bull flag.  This could still drop again to the 10sma and that trend line, but it really looks bullish.  Maybe the Fed will use the “inflation” word and causes this to pop higher?

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SIDE NOTE: EARNINGS ARE DUE TO BE RELEASED FOR HBM THIS FRIDAY, and that is always something I try to take into consideration when buying a stock.  It could POP the stock if the news is good, or drop it if the earnings ‘miss’.  The last earnings report was in Feb, and the stock ran from $2.oo to $4.50

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We discussed CLF in yesterdays report.  I mentioned that a small starter position could be made at the 20sma , since it repeatedly tagged that support area and moved higher in the first run up.

We were buying CLF  in March at the 20 sma, shown in this March report.

After a very steep run,  I sold out of it and wanted to re-enter on a pullback. This chart yesterday showed the 20sma, and maybe the blue trend line as places that it wanted to drop to. So I wouldn’t take a full position at the 20sma, maybe just a small starter position, in case it drops further.

CLF – I started a position on Tuesdays dip, mainly because I saw all of the commodities putting in reversals higher. You can see that it could drop further, especially to the 38% retrace near $3.50. I will add on a drop.

CLF –   THis thought crossed my mind about CLF  tagging the 20 sma.  Looking at this chart I remembered how we rode out that long sideways consolidation in March. IF we got another smaller one here riding along that red line,  the 20sma would eventually catch up to price, instead of Price dropping to the 20sma.

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By the way, this is my March 21 ‘buy the break out’ chart at $3. It ran to $5.00+, and we are looking at the pullback now.  This chart  shows huge potential if we are in a commodity recovery.   CLF  was actually  over $100 5 yrs ago. I think that CLF is ridiculously cheap right now, if we are in a commodity recovery.

This past weekend I was looking at CLD and drew these weekly and daily charts.  It looks set up  to join the commodity run too.

 

CLD –  Look at this weekly base.

CLD DAILY –  It doesn’t look like much, but if you bought this stock in February, you would have already doubled your money.

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 We also watched  US STEEL – ticker  ‘X‘ run from $6 to $20 in 3 months. They released earnings and and did not sell off in after hrs.  This is a STEEL company that was beaten down to ridiculous levels too.  I’m showing these charts to point out that some of these Commodity / Metals companies could still have large gains ahead of them as they recover.  AKS  ( AKSTEEL) Also put in a strong reversal yesterday.

For now, I want to end this report with these charts of interest in the commodity sector,  just to show how things are lining up.   Those reversals in AA, FCX, CENX were very bullish if you ask me.   I would buy any one of them in this area with a stop a bit below Tuesdays lows. Maybe wait until after the Fed volatility expected at 2 p.m.?

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There are so many other set ups to  watch in Energy and the Commodities, but this is enough for a Fed Wednesday.   Lets see how things play out after the 2 p.m  release. We could get a little pull back  or a break out, but either way we benefit.  A break out adds conviction to the trade set ups  and a dip may be the perfect buy spot.  In Thursdays report, I will cover buying opportunities and chart set ups as  they present themselves.

 

Have a great day trading and be ready for whatever volatility the FED Decision on interest rates may  bring are way.

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~ALEX

 The usual warning always stands. Buying a small basket of stocks is far better than buying too much of one or two stocks. The risk is that some bad earnings or news in a beaten down sector could adversely affect ANY  companies stock.  Look up a stock on  YAHOO.COM  FINANCE and read the news headlines.  Find out when they release earnings, due diligence is important, etc  🙂