Thursday August 31

 The General Markets are breaking higher as expected, and the Biotech sector is also acting Bullishly. After reviewing these sectors and the Precious Metals, we’ll review some bullish set ups in various Tech and Biotech companies.

AUG 25th –  This weekly chart reversal at support was a buy point, so I pointed this out last week, along with some Stocks in this sector.

 

IBB –  The daily chart showed price breaking and holding above the 50sma on Tuesday too.

IBB –  And we have strong follow through yesterday, so let’s look at a couple of these stocks.

 

NASDAQ –  On August 29th we saw a strong reversal after a drop filled that gap. The timing was right for a dcl too. This became a buy and a break out above the overhead trend line would add confirmation.

NASDAQ – We have the trend line break as of yesterday.

SPX – The SPX is a bullish set up too.

USD – This shake out looks pretty Bullish, and to be honest, it could weaken Golds upside resolve. It will take a little time to see how things react,

 

No real change in OIL & NATGAS –  NATGAS inventory report is released on Thursdays , so stay tuned.

 

GOLD, SILVER, & MINERS

 

NOTE: As mentioned yesterday,  I will hold individual Miners (and some were Green on Wednesday), despite the USDs bullish reversal and Golds drop. As far as holding on to leverage? That may not be a good idea, especially if the USD is about to make a run higher.  That could affect Gold.

 

To get right into  GOLD, SILVER, & MINERS,  I first want to post 3 charts from yesterday as a review.

 

1. GOLD IN A CHANNEL

 

2. GOLD COULD BACK TEST THE BREAK OUT

3.  GDX –  The drop could go semi deep , if it seeks out a dcl now.

 

Now for some newer charts

 

GOLD – The yellow area would be a back test of the break out. So far on Wednesday Gold held up well.

 

Yesterday I mentioned that it is possible that we get a mild a-b-c correction like this.

 

AND SO FAR, GOLD IS HOLDING UP AND WE STILL COULD BE SEEING THAT  A-B-C.  SOON GOLD WOULD DROP TO ‘C’ at $1290- $1300 if this plays out

 

I want to show you something interesting. I am NOT saying that this will happen, but in 2016 we saw this ‘change in character’ with the GLD.  IT makes buying the dip difficult, because the dip is muted.

 

GDX – Notice that GDX popped out of the blue channel.   When something pops above a channel and then drops back inside, it usually drops back to the bottom of the channel, and that would be a GDX back test too.  See the chart.  However….

 

At times, price breaks above the channel like it did in 2016 GLD and then begins a steeper accent. Buying the dip after the channel break was not possible. So in the above chart of GDX, watch to see if GDX breaks back into the channel, or might it ride on top?

If we drop back inside the channel, we should tag the lower channel line too.  That may be a future entry pooint.

 

GDXJ –  GDXJ does not have a channel , since it was forming a triangle. This would be a normal back test.  However, if this holds…

 

 

GDXJ –  We may begin to look at GDXJ this way, with 2 channels.

 

GDXJ – We can tighten up the pattern if the price stays in the upper channel.  Either way,  we look to now be trending higher in Miners, with higher lows in place.

Speaking of trending higher, I wrote a couple of segments  about STEEL stocks a few weeks showing that they continue to move out of the lows and are slowly trending higher.  After normal sideways consolidations,  they began moving again yesterday, so lets take a look.

 

X – SLow but steady, this was a Buy & Hold as long as it remains above the 50sma.  It looks like it could be ready to make a run.

CLF – Breaking out.  This could be a double from the May lows soon.   CLF looks really nice, though it has bored many people to tears.

 

CLF – Do you see the 1 month sideways move? Picture that some Miners may do this, and also some already have been doing this. It is NOT a sign of weakness, it builds energy to move higher. I constantly get questions asking me, “Why is my Miner so weak?”  It is not, it is building itself up for a move higher.

 

SID –  I sold sid near the highs to lock in gains and free up funds. That could be a mistake if this breaks out with Steel stocks.

SID – I may need to get back in.  Is that a Mini Cup & Handle?  🙂  SId has moved up, sideways, up sideways, up sideways. That is very nice.

GGB – Bullishly rising higher

 

IBB & XBI –  BIOTECH / PHARMA

 

IBB –  And we have strong follow through yesterday, so let’s look at a couple of these stocks.

 

VSTM -I pointed out the wide triangle patterns has recently become a tight bullish squeeze. I made some great gains in VSTM in June, and now as it consolidated and was sitting at the APEX as it was shown to be here, I took a good position with a tight stop  (low risk).

VSTM –   Just in time, it popped 12% yesterday. They are set to release very important news soon on one of their key studies, and this could seriously affect this stock.  It is still a very bullish set up, but I sold more than 1/2  due to the news being released soon regarding tests and trials.  Biotech test results can cut a stock in half or double it in a heart beat.

IDRA AUG 29 – I pointed out an IDRA break from a down trend , and it slowly continues higher. It could eventually run to former highs.

IDRA AUG 30 – Again, slowly, day by day it moved higher.

OPHT – I own this one, it too has been a very slow but steady gainer lately. Take a look at a 1 year chart and you’ll see that this is in a huge base after a steep drop. It looks to be recovering.

CRMD – I bought and sold this one in June or July.  It had a solid base, but I got bored with it. On Monday it POPPED and now is back testing that pop.  I think that it could be starting the move that I expected in June. It could be bought in this back test area, but it is tough because it could back test the blue trend line OR the red 50sma. Big price difference.

MBOT – Is this ready yet?  It is still under the 50sma ( And CRMD above was for quite a while too), so it could continue to form this base. These long bases can get explosive if they break out.   The story, they did a financing for a deep discount to 3 institutions to raise $10 million for future acquisitions.   That dropped this stock sharply in June. The chart seems to indicate that buyers ( good sized buyers) are stepping in at the $1 level.  This is a great one for a watch list.

 

 I got an email that made me very happy.  One of our readers mentioned that this spring I pointed out 2 stocks  ( TTWO & JBL) that had nice consolidation patterns, and I compared the consolidations to  NVDA, AAPL, PRCL, etc.  I then said that “This is a great BUY & HOLD candidate for those that do not like to trade, our longer term investors. It is above important moving averages, long term uptrend, etc.”   That person bought it and kept it.  While JBL has been choppy & sideways, slowly moving higher,  TTWO is shown below…

 

TTWO APRIL 20 –  I called this break out a buy near $58 and this was the immediate follow through.

TTWO – It is almost up 100% from April, so our reader wrote to tell me that it would be their first 100% gainer if it keeps going.  Great job holding on, that was a very rough ride in June, I know that I would have sold it.

There also have been some beaten down Tech stocks that I mentioned in the recent past, and they are still looking fine, despite the recent market corrections.  I think that makes them stand out as bullsih survivors.  Notice these stocks…

GRPN –  Near recent highs despite the NASDAQ sell off. This is a sign of strength.

PXLW – PXLW is breaking from a down trend. This could make a run here, as the general markets move higher again.

 

Not a tech stock- this is a finance stock.  It has doubled off of the lows …

JRJC WEEKLY  – This stock has doubled  in 3 weeks during the sell off.  and looks like it could continue higher after a back test here.  Another good one for the watch list.

BASES & CONSOLIDATIONS–  I repeatedly say that I like long bases and when we see our Miners, or CLF, VALE, X, HBM, etc just churning sideways, it can be bullish.  Take a look at this company KEM that manufactures ceramic capacitors.

KEM spent years around $4 to $5 and then dropped down to $1 area. That produced a long base that didnt look that good, but when it broke higher recently, it just accelerated its climb.

 

SO we have Bullish moves in the general markets and biotech. With the recent bullishness reported in this weeks reports, Some have entered TQQQ, others LABU, based on feedback that I am getting. Oil didn’t move much with the oil inventory report, and NATGAS has their report this morning.  I like the steel stocks and other commodity stocks that we have been trading and watching for the last few weeks, months.  I also like the Biotech sector.  Precious Metals are consolidating gains, and may offer good buying opportunities in time as this takes place.  It has only been a day or two of stalling or dipping, so it will take more time to see where these opportunities may be.

A few trade ideas are in this report for the active traders,  others may want to wait for opportunities to develop in the Miners.

Enjoy your Thursday trading!

~ALEX