Thursday, 25 May 2017

CHK, RIG - whacked lower with oil

With WTIC oil significantly lower after the OPEC meeting, the related energy stocks had a rough day. Chesapeake Energy (CHK) and Transocean (RIG) settled lower by -6.3% and -7.6% respectively. Near term outlook is bearish, but the mid term outlook will turn bullish if some aspects of overhead resistance can be broken.

CHK, daily

RIG, daily


Energy stocks have been broadly weak since Dec'2016. Relative to WTIC oil and Nat' gas prices, energy stocks are actually lagging rather badly.

Key levels...

CHK: declining trend, currently at $5.80, and the 200dma in the $6.20s. The cautious will wait to meddle in CHK until some weekly closes >$6.30.

RIG: declining trend, currently around $11.40, and the 200dma in the $11.90s. The cautious will wait for the $12s.

Of the two, I favour CHK, especially as I see better upside in Nat' gas, than in WTIC oil.

Wednesday, 24 May 2017

TIF - no breakfast for Tiffany

Whilst the main market closed a little higher, there was very significant downside in Tiffany (TIF), which settled -8.7% at $85.03. Near term outlook is bearish, with next support at the 200dma in the $80s. The March high of $97.29 likely marks a mid term high, and was itself notably below the Nov'2014 high.

TIF, daily

TIF, monthly


First, see:

Earnings were actually better than a year ago, but market expectations have been leaning on the rather bullish side, and today's numbers were simply not met.

Technically, today's big drop is merely part of a downward trend that began in late March, when Tiffany fell short of the giant $100 threshold.

Things will turn very bearish on any monthly close under the key 10MA, which is currently in the $81s... interestingly just above the 200dma.

Unquestionably, high end retail is a better type of retail to be in than the low end - such as SHLD, M, or JCP. Yet.. its important to keep in mind than when the next recession hits.. high end will also greatly suffer.

For now.... there is ZERO sign of a US recession.


Breakfast at Tiffany's, 1961. A distant time, when more women knew how to dress.

Tuesday, 23 May 2017

FCX, TECK - choppy copper miners

With copper prices remaining broadly stuck within a range of $2.70-2.45, the related copper miners remain broadly choppy. Freeport McMoran (FCX) and Teck Resources (TECK) settled +0.4% and -2.7% respectively. Near term outlook is for further choppy, leaning on the weaker side.

FCX, daily

TECK, daily


Suffice to add, it was a bit of a mixed day for the copper miners. Both FCX and TECK have really struggled since January. Even if copper can break >$2.70, it will take at 6-8 weeks for both stocks to have any hope of breaking a new multi-year high.

Of the the two, I personally favour TECK.

For those who prefer ETFs, there is COPX.

Monday, 22 May 2017

F - Fields gets the kick

Whilst the main market closed moderately higher, there was notable strength in Ford Motors (F), which settled +2.1% at $11.10. Things will turn bullish with a break above declining trend/resistance, which in August will be around $12.00. Any price action >$12 will offer the $15s before year end.

F, daily

F, monthly


The rumbles were apparent last Friday, with a report that the Ford family were increasingly frustrated at the mid term stock price performance.

I said to a fellow trader at the time 'Firing fields would be a start'.... I didn't realise we would see it just a few days later.

Jim Hackett.. the new guy

What now for Ford?

Ford remains a hugely profitable and successful company. I'd refer anyone to go dig in their recent earnings report. Things are ticking along fine. The equity market though has little else than contempt for the company. Why? Well, the 'new normal' is one where growth is everything, even if it doesn't mean any profits (such as AMZN, NFLX, or TSLA).

The technicals

Declining trend/resistance from summer 2014 is currently around $12.50, and that is ticking lower by around 15/20 cents per month. A break above declining trend still seems an inevitable outcome.

I'm bullish Ford for the long term. The kick of Fields is a start, but the company now needs to focus on self-driving car technology, as that is where we're headed. If Ford can just tap 10% of the media attention that Tesla garners, Ford will eventually be in the $20s. If the latter, the implications for the broader market would be hugely bullish.

yours.. awaiting a 100% self driving car... probably due by 2020.

Friday, 19 May 2017

GDX - a choppy week for the miners

It was a choppy week for the Gold miners, with the sector ETF of GDX settling the week on a positive note, +0.9% at $22.86, which made for a net weekly gain of 0.6%. Near term outlook threatens further choppy price action, but May does look set to close with a net gain.

GDX, daily

GDX, weekly


Suffice to add, a week of chop. Relative to the gains in the precious metals, the mining stocks are still lagging. The situation is actually very similar to oil and the related energy stocks.

Another big push higher seems due this coming summer. Things will turn rather bullish for GDX with a break above the Feb' high of $25.71. If that is seen, it will open to the door to a straight challenge of the summer 2016 high of $31.70, and that is a very considerable 38.7% to the upside.

The key thresholds to keep in mind: Gold $1400s, Silver $22s, Copper >$3.00, and GDX >$32.

I remain leaning bullish... as I believe 'Mr inflation is out there'.