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Chart of Day: The Dollar’s Falling Wedge

Apr 15, 2017

There are two things likely to take the US dollar back below 100.46.

For one, it’s finding significant resistance points once we draw our trend lines. Here you can see that it’s falling and flailing in a falling wedge pattern. Until it breaks above 101, the pattern could persist for some time.

The other reason for weakness is new comments from Donald Trump that the currency is far too strong. “I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me,” he said. “But that’s hurting – that will hurt ultimately.”

As long as the dollar moves lower it’s great news for gold. At the same time, we are looking for a potential bounce in gold once it tests the bottom of the falling wedge. Be sure to keep an eye on it, too for potential opportunity.

Happy Passover and Easter.  We wish you all the very best.

 

Chart of Day: It’s time to take the Win on CSIQ

Apr 11, 2017

On March 29, we recommended buying the CSIQ stock (at $11.60) and the May 12 calls (at 80 cents) because the stock had become so severely oversold. It’s a good thing we did. We would have missed the run that followed. As of Monday, the stock was up to $13.16. The May 12 call was up to $1.70. Those aren’t bad gains at all for a few weeks. Take both off the table, as the stock becomes overbought. We’ll jump back in on a pullback.

Chart of Day: The One Retailer that's About to Bounce Back

Apr 09, 2017

Of all of the struggling retailers, the one that should be fine is Ross Stores (ROST). But what’s piquing my interest in ROST isn’t just how fundamentally undervalued it’s become, it’s how technically oversold it is at its 200-day moving average.

First, we can see just how oversold ROST is on relative strength, MACD and Williams’ %R, but also take a look at the history of the stock at its 200-day. Since the start of 2016, each time the stock dips even slightly below that average, it snaps back not long after, especially between June and July 2016.

All of those indicators combined leads me to believe ROST is now overdue for a move higher. And we’re recommending two ways to trade the opportunity.  One, consider buying to open the ROST May 2017 62.50 call at market. And, or two buy to open the May 65 call at market as well. Both should do well. To protect these trades from unforeseen chaos, have a -35% stop loss.

Chart of Day: Traders are Wimps, Miss 50% Win

Apr 06, 2017

On March 29, we told you how severely oversold Canadian Solar (CSIQ) had become. We recommended buying the stock at $11.60, even the CSIQ May 12 calls at 80 cents. We were told this was a bad trade because solar was out of favor.

However, that’s exactly when you want to buy any stock, when it’s out of favor because wimpy traders can’t stand fear. It happens all the time. They buy because every one else is. Then they sell when every one else does and they can’t figure out why they can’t make money on Wall Street.

It’s not even a challenge any more. Those that get caught up in the herd just deserve to do poorly because they’ve already set themselves up for abysmal failure.

Right now, the CSIQ stock trades at $12.68. The May 12 call trades at $1.20.  Exit half of each.

 

 

Chart of Day: Always Short Excessive Greed

Apr 05, 2017

“A climate of fear is your friend when investing; a euphoric world is your enemy.” 

“Be fearful when others are greedy and greedy when others are fearful.”

Both were said by the $71 billion man, Warren Buffett. Yet, traders never learn. For example, just yesterday, we noted that our call option recommendation was up 350% in weeks on the trade. So, we took the win.

And then we recommended going short with put options.

That’s because the Street got far to greedy. They sent the stock up too much too soon where it’s beginning to pivot lower on overbought momentum indicators. The stock is now down about $3 on the day and likely to slip even more as smart traders become fearful when others are far too greedy.

We’d love to hear how you did with both sides of the TSLA trade so far.

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