Friday 31 May 2013

RIG - ending the month on a downer

With the main indexes on the slide, and with Crude Oil down almost 2%, Transocean (RIG) closed the month on a particularly sour note, -2.9% @ $50.23. However, the 200 day MA @ $49.95 will offer some support, and there is the mid April price cluster action in the $48s.

RIG, daily


Today was the tenth day of a down cycle, that has taken RIG from the mid $55s to the low $50s. Effectively..a drop of almost 10% in as many days.

Underlying MACD (blue bar histogram) cycle is very low, and again ticked lower today. There is no sign of a turn/levelling phase yet.

RIG needs to clear $52, which if achieved, will open up 55/56 within the following 2-3 weeks.

*I am long RIG (as of today), from the mid $50s. Seeking an initial exit in the 52/53 area, but I generally do see good upside to 55/56 by late June.

Thursday 30 May 2013

AAPL - comfortably holding the 450s

With the main indexes a little higher, AAPL was leading the tech sector, closing +1.5% @ $451. Near term trend looks mixed, but AAPL is clearly very much outside and above the old multi-month declining trend. Strong support around $430, mid-term upside to the low $500s

AAPL, daily


Suffice to say, AAPL is holding together after that very destructive fall from the $700s.

It would now appear very unlikely that AAPL will take out the mid April low, for some months, perhaps even the year.

AAPL remains one to watch, especially as a broader guide for the tech sector.

Wednesday 29 May 2013

GDX - miners still in a bear flag

The miners were in stark contrast to the weak indexes today, with GDX closing +4.7% @ $28.50. Near term trend remains moderately bullish, but the price formation remains a bear flag. GDX needs to close the week >29,  even then, the monthly trend would still be lower.

GDX ,daily


Suffice to say, a very strong day for the miners, which was especially impressive considering the main equity market. No doubt the moderately higher Gold price helped give the miners an extra kick higher.

Near term price formation is still a bear flag, despite today's strong gains.

In the bigger picture, GDX needs to put in a number of daily closes above the old declining trend, which is currently all the way in the 36/37 area. That is almost 25% higher!

With Gold and Silver prices still in near freefall - as best seen on a monthly chart, the miners are going to have real trouble seeing some multi-month gains any time soon.

Tuesday 28 May 2013

MRO - black candle, suggestive of downside

Marathon Oil (MRO) closed higher - in sync with the main indexes, but closed below the opening gap higher, settling +0.9% @ $35.48. The daily candle is highly suggestive of downside across Wednesday, and possibly the next 2-3 days, target is $34/33.

MRO, daily


Suffice to say, a black candle on the daily chart is a pretty good bearish indicator for the subsequent few days.

It is very reasonable to count the last few days as a minor 2 - or B' wave bounce/rally, and we're now due another day..or two on the downside.

Obvious downside is the $34/33 area, where the 50 and 100 day MAs are lurking. Further, by the end of the week, the low daily bollinger will be providing support in the 33s too.

MRO is a very profitable company, and from a chart perspective, it looks good for $40s later this year, especially if the QE continues, and Oil can at least hold the $90s.

Friday 24 May 2013

FB - fails to hold key support

Facebook (FB) was lower for the fifth consecutive day, closing -3% @ $24.30. Key support of $25 has failed to hold, and very natural downside to the $20/19 level is now viable across the next few weeks.

FB, daily


FB has now been in a very consistent down trend from the low $29s, for the last three weeks.

Underlying MACD (blue bar histogram) is now very deep in negative territory, but so far, there is no sign of any turn/levelling phase. Considering that $25 key support has failed, the momentum is clearly on the side of the bears.

There is a very reasonable possibility of FB sliding down to the big $20 level. Of course, that will be a little more difficult if the main indexes start battling higher into June.

I still hold to the notion that the stock is wrapped in media hysteria, and could easily go the way of geocities and myspace.

Thursday 23 May 2013

SCCO - broadly falling lower

Southern Copper (SCCO) failed to participate in the index bounce today, and instead held onto declines, closing -3.1% @ $31.71. Near term trend looks very weak, and next key support is the mid April low in the $30s. A break of 30 will open up $29 early next week.

SCCO, daily


Suffice to say, SCCO is suffering from what remain weak commodity prices. Copper hasn't broken the $3 threshold yet, but it still might, and if that's the case, the mining sector as a whole - including SCCO, will see much more severe falls later this year.

Underlying MACD (blue bar histogram) cycle is ticking lower, and is set to go negative at the Friday open.

A break under $30 does look more likely than not, if the main indexes can hold the sp'1600s across next week.

Wednesday 22 May 2013

FCX - on the slide for a second day

Freeport McMoran Copper & Gold (FCX) fell for a second consecutive day. After earlier gains, it swung lower - along with the main market, closing -1% @ $31.66. Near term trend looks very bearish, and next downside target is $30, thats another 5% lower.

FCX, daily


This mornings gains failed to break the recent high...which in fact looks like a short term double top.

A hit of the rising lower bollinger band, around $30 now looks very likely.

FCX remains one of my favourite Miners (but also now involved in the Oil/Gas sector). Yet, the mid-term trend is STILL downward, and the daily trend is now also lower.

The big question is can FCX hold the $30s. If not, are we looking at a challenge of the lows from mid-April?

One to watch, especially as a guide for the broader market.

Monday 20 May 2013

GDX - miners find an escape route?

With Gold and Silver opening lower, the miners were similarly lower, but the morning reversal held into the close, and GDX put in an impressive daily reversal, closing +6.2% @ $28.00.  If the metals have indeed floored in the immediate term, then GDX will continue to rebound.

GDX, daily


A strong day for the gold miners - with a rather good bullish engulfing candle, but GDX is still below key declining resistance.

To have any confirmation of today's daily reversal, mining bulls need to see a few daily closes >$30. A break above $30 will open up the 35/36 zone.

Mid/long term trend remains extremely weak however, and we've seen this kind of bounce a fair few times in the past ten months.

Good long-stops will be important, the obvious level are the low $26s.

Friday 17 May 2013

MRO - breaking into new ground

Marathon Oil (MRO) followed the main market, and closed the week with a very impressive gain of +2.8%, resting @ $36.15. Today was a historic close, and there is no sign of the current upward trend ending. There is literally no ceiling now, on what remains a profitable company.

MRO, daily


A very strong close..a breakout, and a new historic high. It really doesn't get any more bullish than this.

I have been following MRO quite closely in the past few weeks.  The past few weeks have provided a very powerful move higher, and MRO achieved an extremely important breakout closing level.

*I am not meddling in MRO yet, but will look to go long on ANY minor pull back in the weeks ahead.

Next key levels are pretty straight forward psy' levels of $40..and then the big $50.

If my hyper-bullish outlook for 2015/16 is broadly correct, then MRO has a fair chance at hitting $100.

First things first though...lets see if MRO can put in a few more daily closes above this old resistance level, and then make an attempt to $40.

Thursday 16 May 2013

RIG - rolling over

Transocean (RIG) has had a very strong run since the mid April low of $46s. RIG closed -0.6% @ $54.76, and considering the recent surge, it'd be natural for a minor retracement down to the 53/52 level. Mid-term trend - along with the main market, appears very strong.

RIG, daily


Suffice to say, RIG looks pretty good in the mid-term, but like the main market, it can't go up forever in a straight line.

A very minor retracement of 5% or so seems very likely in the near term.

Mid-term upside could be very substantial. A few daily closes in the low $60s will open up $75, and then $85.

Wednesday 15 May 2013

GDX - miners digging deep again

With the precious metals seeing significant falls, it was no surprise to see the mining sector similarly hit. The Gold miner ETF of GDX slumped -4.6% @ $27.38. Near term trend looks pretty dire, and a break under the mid April low now looks a given.

GDX, daily

GDX, monthly


A somewhat fierce downside daily candle for GDX. It came very close to taking out the low from mid April, and frankly, that looks almost guaranteed tomorrow.

The monthly chart looks even worse, there really isn't any floor until the low 20s, which is a good 20/25% lower.

If Gold and Silver remain weak in the months ahead, there is little reason why the mining stocks will even be able to hold flat - even if the main market continues to battle higher.

It remains a dire trend, in the near term, mid term, and long term.

Tuesday 14 May 2013

AAPL - still in a baby bull flag

Whilst the broader Nasdaq tech index clawed almost another percent higher, Apple (AAPL) was a major laggard, slipping 2.4% @ $443. Yet, AAPL is probably just in what is now a six day bull flag. A daily close in the mid 460s will confirm the flag, next big target remains $500

AAPL, daily


Suffice to say, I'm guessing its a bull flag. Perhaps another few days of very slight downside, but then up across the second half of May.

If that is the case, when AAPL breaks upward, it'll give an extra boost to other tech stocks in late May..and into June.

AAPL remains one to watch!

Monday 13 May 2013

BKS - hysteria fading to reality

Barnes and Noble (BKS) ramped last Thursday, but the daily candle was a classic warning that it wasn't going to last. Despite a brief new high early Monday, the sellers are back, and BKS closed -9.3% @ $21.15, although the low was double that, @ $19.86.

BKS, daily


By the end of this week, there is little reason why BKS won't be back in the low 19s, or even 18s.

Regardless of the possible deal with Microsoft (MSFT) that might purchase the Nook e-book unit, BKS is still losing money on every book sold.

That is not a viable long term business model.

Friday 10 May 2013

AAPL - baby bull flag

Apple (AAPL) failed to melt higher with the main market this week, closing Friday -0.7% @ $453. Price formation though is a rather clear baby bull flag. First upside target is the big $500 level, and then the (still declining) 200 day MA @ $532.

AAPL, daily


Suffice to say, AAPL remains extremely under-valued relative to the main market.

Baring a major break lower in the indexes - and that seems only viable if QE is terminated by the Fed at the next FOMC of June'19, AAPL looks set to break back into the 500s this June.

How AAPL copes when/if it hits the 200 day MA will be VERY illuminating for both AAPL..and the broader market. A few weeks above $550, and then the question would become 'Can AAPL take out the Sept'2012 high of of the $700s?'.

The wider economy being considered, I'd have to think the answer to that is ...No!

Thursday 9 May 2013

BKS - big jump, but still losing money

Barnes and Noble (BKS) soared on a report that Microsoft (MSFT) might be about to put in a bid for the Nook. BKS closed +24.5% @ $22.13, which was pretty close to the high of the day ($22.79). The daily candle however was a somewhat bearish black shooting star.

BKS, daily


We've seen this kind of crazy hyper jump in BKS before...and it didn't work out so great last time.

Check this out....from May'2012

Didn't work out so well there, did it?

A daily close under today's low of $20.20 would be the last warning that BKS will simply lose all the gains.

The real problem

BKS remains a loss making retailer. It has sales of almost 7bn a year, but they are still unable to make an operating, never mind an actual net profit.

see key stats @ yahoo! finance

If they do dispose of their Nook unit, then what then for BKS ? They made such a big deal of going into the tech-book arena, and now they seem equally desperate to get out of it.

As Schiff might say, they lose money on every book sold, but make up for it on volume.

Wednesday 8 May 2013

RIG - fifteen days up, and counting

Transocean (RIG) climbed for the fifteenth consecutive day, closing +0.9% @ $55.26. This is the fourth daily close above what appears to be a giant bull flag - that spans back to early February. Near term trend is certainly overbought, but there is no sign of a turn yet.

RIG, daily


RIG is one of the market leaders right now. The next key target is to break above the $59 high from mid February. That seems very viable by late May/June.

A weekly/monthly close >60, will open up the March 2011 high of $84

RIG is certainly one of the better companies in the Oil/Gas service sector, but it has a rather large amount of debt, and its not paying any dividend.

see key stats @ yahoo! finance

Regardless of the balance sheet, as noted, any close in the $60s..opens up a further $25 of upside, which is a clear 40%.

Tuesday 7 May 2013

FB - set to test the $25 low

Facebook (FB) closed lower - in stark contrast to the main market, for the third consecutive day, -2.5% @ $26.89. Near term price action looks rather weak, the big $25 threshold is critical. If that fails, then sub 20s are again viable this summer.

FB, daily


Suffice to say, its somewhat amusing to see FB rolling over, whilst the main market just keeps on melting higher.

A break under 25 won't be easy, not least if the main market keeps on rising.

Yet on any basis, FB is over-valued by a factor of 4, if not..10.

Price/earnings do matter, at least across the longer term.

Monday 6 May 2013

TVIX, UVXY - equity bear failure

With the bears failing to build upon last Wednesdays index declines, the main market is right back to algo-bot melt. The 2x bullish VIX instruments of TVIX and UVXY are thus back on the slide of decay, both slipping over 3% today. Outlook appears...grim.

TVIX, daily

UVXY, daily


First, keep in mind the VIX daily chart...

VIX is back in the low 12s, and looks set for the 11s, perhaps even 10s. Indeed, we have complete and utter market complacency.

As for TVIX/UVXY, even if the market just churns sideways for a few weeks, that will have very serious downside implications, probably in the range of 10-15%.

If my outlook for the broader market is correct, with Trans'7000 - and sp'1800s, then VIX looks set to have a chance of going sub'10 this summer.

If the hyper-bullish outlook is even broadly right, then TVIX and UVXY will decay by 50%, and that's probably an under-estimate.

As ever...such things are for short term holds only, and that includes periods when the VIX is low.

Friday 3 May 2013

AAPL - a very strong week

With the headline indexes breaking into historic territory, AAPL is following, and closed +1% @ $450. The next big target is the $500 psy level, but perhaps even more importantly, the 200 day MA, which is now lurking in the 530s. Time frame for the mid 500s would be July/August.

AAPL, daily


The $450 close is a very positive sign that an intermediate low has been put in. Yes, lower levels are still possibly across the longer term, but then AAPL itself is under-priced relative to the main market.

Trend is clearly upward, and it would seem the mid $500s will now be hit this summer.

The big issue is how will AAPL trade when it hits the 200 day MA.

As ever, an important one to watch.

Thursday 2 May 2013

FB - hot money flowing into Facebook

Facebook (FB) saw some significant gains after earnings came in broadly as the market had been expecting. FB closed +5.6% @ $28.97. Next soft resistance is the psy' level of $30, and then the high of the $32s from late January.

FB, daily


So, a rather strong daily gain for the hysteria surrounded stock that is the FB.

Roughly, earnings look to be around 50 cents a year, and that would give a PE of around 55/60.

On any basis, that is 4x the market average, and thus I find the current valuation as nothing less than stupid, but then...there are plenty of other more extreme examples like AMZN or NFLX.

see key stats @ Yahoo! finance

As many still suggest, real long term value might be close to zero, but myspace and geocities were around for a fair few years before they were abandoned by just about everyone.

Wednesday 1 May 2013

TVIX, UVXY - ready for a big jump

With the indexes failing to be inspired by the FOMC, the VIX saw moderate gains of 7% into the close. The 2x bullish VIX instruments of TVIX and UVXY showed appropriate gains of 6.8 and 8.2% respectively. Near term offers some very strong viable upside.

TVIX, daily

UVXY, daily


First, keep in mind the daily VIX chart...

The VIX looks set to at least hit the 16/17s by the weekend. However, the big 20 threshold is viable if the market can make a challenge of the key sp'1536 low.

As for TVIX and UVXY, there should in theory be upside of 25/30%..minimum - if VIX can spike into the upper teens. Much more dramatic though would be VIX 20 - which would probably offer 50% gains for TVIX/UVXY.

That degree of upside is viable as early as this Friday. There is the big monthly jobs data, and if Mr Market gets rattled with fear of genuine economic weakness, then we might see a rather significant drop in the headline indexes - not just the Trans/R2K, as we saw today.

As ever...such leveraged instruments are for short term trading only. Even a short 4-6 month chart displays the inherent dire decay.