I was confused too. But no, $DQ is not America’s favorite destination for shakes, malts, and blizzards. But it is sexy in it’s own way — it’s an energy company named Daqo New Energy in one of the hottest sectors we think will be leading stocks higher this year — Solar Energy. According to wikipedia, $DQ is a Chinese company “engaged in the manufacture of monocrystalline silicon, polysilicon, and silicon wafers, primarily for use in solar photovoltaic systems.” OK, sounds cool? It really doesn’t matter to us, we’re just following price, and we’re going to trade it with options in a defined risk spread. [Read more…]
Everyone always wants to talk about how high the stock they just bought is going, or how much money they’re going to make on a new position. “JC I think Apple goes to a Trillion Dollar Market Cap!” or “JC Bitcoin is going to $100,000!”. These are things I hear frequently, or at least some sort of variation of these comments.
This is perfectly normal behavior. We should not be afraid of it. But more importantly, I think we need to be aware of the implications of these feelings. The thing is, once we are already in a position, our emotions get involved. When our stress levels rise, we act emotionally, rather than logically. This is how we’re hard-wired. It would be abnormal for us not to think this way. But again, the important thing is to be conscious of it and not let it dictate our actions.
It might sound like we’re beating a dead horse here, but the Russell 2000 printed another new all-time high yesterday (I know, it ended up being a red day, but that volume tho…) and there’s just no way I can view this with any bearish context. Sure, perhaps it’s extended and due for a rest (or gasp, a pullback) but it’s simply irresponsible to be spouting actively bearish broader market calls in this environment right now.
As such, the team at All Star Charts keeps digging into the sectors that are looking like candidates to lead the next leg of stock market gains higher. Today, we’ve got our eye on the Biotech sector. [Read more…]
From the desk of Tom Bruni @BruniCharting
If you’ve been reading our content over these last few weeks, you’ve likely noticed we’ve been performing a lot of deep dives on the sectors we want to be involved in on the long side like Solar, Energy (premium), Retail, and Software (premium). Healthcare in general has been a laggard and the Medical Device space continues to lead, but now we’re seeing Biotechnology start to break out as well. In this post we’re focused on the equal-weighted Biotech ETF $XBI, as the cap-weighted $IBB is lagging significantly and remains weak. This out-performance by the equal-weight sector ETF signifies a broad-based rally is underway, so we’re looking for the best names in the sector to take advantage of this theme.
As the daily chart below shows, the XBI has tried several times over the last six months to clear resistance at its 2015 highs of 91. It’s failed to hold this breakout twice before, but is taking another shot at it. The fact that the broader market has found its footing again should be a decent tailwind for this trend to accelerate and confirm a successful breakout. Our 120 price target for this breakout is approximately 30% above current levels, so in the rest of this post we’ll be looking at some individual names that look poised to lead this sector higher.
Click on chart to enlarge view.
The team here at All Star Charts is very bullish on the Oil & Gas Exploration & Production sector as discussed here (premium). Before we get into how we’re going to play it, here’s a little background to give color for our optimism for the opportunity we see, from our kid off the bench Tom Bruni:
After a long period of indecision and relative underperformance, the Oil & Gas Exploration & Production ETF $XOP is finally breaking out to the upside and confirming a new long-term uptrend. Many stocks within the sector have spent years making no progress and are now finally breaking out to the upside. Normally we focus on sectors showing relative strength and hitting new all-time highs like software (premium), but every sector has its day eventually (see retail) and it looks like these energy names are finally ready to participate in the broader market’s rally.
As Tom mentioned above, we normally like to play where relative strength and established trends work as tailwinds to help along our trades, but sometimes you gotta take a chance on situations that are showing signs of being the next market leader. Like that kid in the minor leagues that gets a call up when the team is struggling, sometimes you just have to go deeper to find the next clubhouse leader.
Here’s how we’re going to step up with the sector leader (in our opinion):
From the desk of Tom Bruni @BruniCharting
It’s been a rainy week here in New York, however, the Solar sector ETF $TAN was a bright spot as it broke out of a 2.5-year base. As a result, we’ve done a deep dive into the sector to identify several names that look to be offering asymmetric reward/risk opportunities on the long side.
This is such a treat for me. I get to go to India to talk about Technical Analysis with hundreds of really smart and eager to learn investors from all over the country. The biggest investor conference of the year starts on May 24th and I will be the first presentation of the event. The 7th annual Traders Carnival will be Asia’s largest 3 day residential conference and I could not be more excited to participate.
I was lucky enough to visit India for the first time this January. I was blown away by the experience. We had about 200 people at an event at Bloomberg in Mumbai where I was the keynote speaker. The enthusiasm for Technical Analysis was amazing. I’ve never seen anything like it. [Read more…]
Excuse the pun, it was too easy.
Everybody loves a deal. And that couldn’t be more obvious after looking at a monthly chart of Costco $COST going back to the financial crisis that bottomed out in 2009. Shoppers clearly have been filling Costco parking lots and their carts, as the monthly chart has been a beautiful uptrend with very little volatility. [Read more…]