TCK - on another down wave

Whilst the main markets saw a quiet day, Teck Resources (TCK) closed lower by 2.4% @ $24.57. TCK has fallen over 30% since the start of the year, along with the general mining sector, but no doubt today's fall was largely a result of the stock going ex-dividend.


TCK, daily

TCK, 5 year

Summary

I've followed TCK for a fair few years, but not that closely lately. I was actually reminded of it today by Mr Knight, over at slope of hope.

What is absolutely clear, when you look a 4-5 yr chart, TCK looks dire in terms of its price formation. It is arguably a giant H/S formation - much like FCX, and many other of the mining stocks, and its on the edge of breaking critical support.

There is simply ZERO support under $24, all the way down to the Nov' 2008 low of $2.46.

Now, I'm certainly not suggesting TCK is going to lose 90% in the next 6-18 months, but it sure wouldn't be the first major miner to go under in the past few years. Remember Patriot Coal (PCX) ? That went from the $24s to effectively zero.
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As a company, TCK is a good dividend payer, has reasonable net margins of 8%, and looks generally 'okay'.

see key stats @ yahoo! finance

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Certainly, I don't like TCK as a short right now. However, when the main equity market rally does finally get stuck this summer, TCK might be a very valid short. Whether its under $20 at that time, that's too difficult to say.

TVIX, UVXY - smacked lower into the weekend

With the main indexes back on the rise, the VIX closed the week -9%, and the 2x bullish VIX instruments of TVIX and UVXY naturally fell by 8.6% and 9.2% respectively. Near term trend looks pretty dire, with VIX set to be back in the 14/13s sometime next week.


TVIX ,daily

UVXY, daily

Summary

*first keep in mind the daily VIX chart

Today's closing candle was a very important confirmation of yesterdays reversal day in the VIX. We've now slipped from the mid 18s to the low 15s in barely 8 trading hours.

It bodes very badly for early next week, and all things considered, VIX does look set for the 14s, if not the 13s in the latter part of next week.

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As for TVIX and UVXY, well, both got smacked lower into the close, and frankly, its to be entirely expected. Its almost a little surprising they held up as well as they did - considering they are 2x VIX moves, although of course, the further out volatility is holding up a little better.

If the VIX is back in the 13s by next Friday, then both TVIX and UVXY will be a good 10/15% lower.

*At some point this summer - perhaps late July/early August, the main equity market is set for a much stronger wave lower, and the VIX will have its first real opportunity to spike above the key 20 threshold.

Yet that is indeed a few weeks, if not another month or two away.

F - bouncing off rising channel support

With the main indexes rebounding in the latter part of the day, Ford (F) similarly recovered, closing +1.25% @ $15.44. The earlier low of $15.06 was effectively right on key rising channel support. Near term upside would be a rather conservative $16.25/50.


F, daily

Summary

Suffice to say, with the main market having potentially floored at sp'1598,  the price pressure is likely to be back to the upside.

For Ford, the $16s look viable as early as next week. The big question is whether Ford is going to be able to challenge the Jan'2011 high in the $18s, before the current up cycle is complete.