Orbitz and Hecla

Two lovely set ups for low priced stocks.  Orbitz (OWW) has been consolidating for a year and a half in what looks like a 4th wave triangle.  It has trendline and 100 week MA support as well as upward momentum on multiple time frames. Buying anywhere from $8-9.  Stop at $7.15 and target of $13-15 which should be good for a 50% gain.

Hecla (HL) has had steady or increasing earnings as silver has dropped about 50% over the last couple of years. $2 has been solid support which includes 15 year trendline support. Average weekly volume for the last several years has been around 40 million shares. Last week it was 125 million and the Friday volume was 79 million, approximately 10 times the average daily volume. Stop is at 2.19. Target is $9 which would be a triple, but it has potential for even higher than that.  It's got some hurdles in that most moving averages are above it, but my gut says that it will be slicing through those fairly easily.  

In my last post from July I predicted Gold heading down from the 1350 range to 1000.  It made it's way to 1130 and has meandered higher from there.  Hard to say for sure if the low is in, but I think silver and gold are at or near intermediate term lows so watch for their rise over the next year as well as many of the miners. 

I am not a professional. Trade at your own risk. 

Gold dropping to 1000 highly likely, but not right away.

There is a high likelihood that $GOLD is tracing out a consolidating triangle pattern and reaching channel resistance that would result in its long term downward trend that started in 2011 continuing. This is not confirmed at this point in time but appears to be setting up.  If this is correct, then $GOLD will find stiff resistance at 1375-1385 and we will see weekly momentum and cycle indicators turn down.  What is particularly sweet about this is that exits from triangles are usually sharp.  In Elliott wave parlance they are called thrusts because they move so fast. The way I charted it, gold is finishing the E wave.  However, it may still be in a C wave which means the triangle could drag on for another year.  There is also a possibility that it is not a triangle but a 1-2,1-2 and gold will continue upward toward 1500 but this is less likely. We will just have to wait and see.  If it does turn out to be a triangle, you will be looking at a 25-30% move in a relatively short time period and that can spell very good
m-o-n-e-y.

That is a sharp retrace.

IBM put on about $7 in two days for a nice win.  This is an example of how every once in a while an Elliott wave pattern is useful.   It is now at resistance around 188 - 190 so taking 80% off the table.
AXP is still in play to go to 98-100. stop at 94.
MCD was the slow mover with a down day today to trend-line support.  Therefore, this is now a good risk/reward ratio. Should spring up to 105 in a couple of weeks.  Stop at 99.5 minimizes loss.

a few 5 percenters

The trend is still up in many stocks though weekly momentum is starting to wane.  A few stocks in particular look pretty good for adding 5% in the next few weeks.  

American Express (AXP) looks to be coming out of a 3 week sideways consolidation and should head toward 100. I'm buying between 94.10 and 95 with a stop at 93.5.  Expecting similar action from MCD though it may be a little slower to move since the daily momentum hasn't turned up yet.

IBM is looking like a high probability to head up to 186-190 from the 181 level.  What is particularly interesting about this one is that it may be coming out of an Elliott wave diagonal and these usually result in a pretty sharp reversal.  Thus an option play could result in some nice profits. 182.50 strike price calls expiring 7/11 are selling for a buck and should hit around $3. 

On the short side, one would have expected GM to be dropping over the last month or two with all of the recalls, but it appears to have needed to make a retracement from the 5 waves down it did January to April. Now it has completed an ABC to near 61.8%. December 35 puts are $2 and should go to $7 since the target is $28 for the stock.  Stop at 38. 

Trade at your own risk.  I am not a professional.

Weekly charts win

The weekly charts have handily beat out the daily downtrend.  New high in Nasdaq very likely.

Tiffany was a classic example in the markets that anything can happen despite the best technical set up.  CSCO to 27.

Bearish scenario still in play

There have been some erratic price movements to the upside since my last post and QQQ popped up to 88.5. It may still try to hit 89, but downward pressure is on.  Signals I have recently described are still showing in numerous stocks.  One classic example is Tiffany.  TIF had a classic Elliott 5 wave impulse down March to Mid-April, then a back and forth retrace to the Fibonacci 61.8 % retrace which is also at a 3 point downward sloping channel.  Other parameters also point to continued drop in the stock. The initial target is around 80, probably in 3-5 weeks.

A few stocks expected to lead the way down are IBM, SHLD, ANF, and AXP.  Expect about a 10 % drop in these over the next month or so.

Also, CSCO did make it's anticipated pop and should continue toward 27 despite downward pressure on stocks overall.  Stop for CSCO is now 22.4

I am not a professional, trade at your own risk. 

Watching carefully

The bearish signals are most significant in the Nasdaq.  Watch for the 87 area to hold resistance if the bearish scenario is to remain intact.  BMY may be a good long, will continue to watch for follow through on that one.

Da Bears

Special update... I have had a tendency to focus on bearish events in the markets and on several occasions have called downturns incorrectly.  Being aware of this tendency, I have attempted to find stocks that I believe are moving up, such as YRCW, CGI, OWW, CSCO, and a few others to join in with what has been an incredible bull market since 2009. Several of these have done well and a few such as RIG and CLF not so well.  I mention the above so that you know that I have considered my bias and hope that you do not hear me crying wolf with this update.

The chart below shows the daily Nasdaq 100 ETF (QQQ) with a pattern that suggests and impending downturn.  The degree of the drop is not clearly known at this time as it will depend on price action on weekly and monthly charts as well.  I will be paying close attention to those to look for evidence of a new upturn.

However, a preponderance of evidence is mounting that suggests a significant top has occurred in the markets.  

1. Numerous major stocks have closed gaps that were left in impulse waves with retracement type patterns.  GE  and AT&T are excellent examples.

2. Many major stocks appear to have completed bullish 5 wave impulse patterns. AA, BIDU, NFLX, APC, AET, BA, TIF

3. There are several stocks with weekly bearish candlestick patterns (inverted Hammers and bearish engulfing) 

4. Banking stocks have turned bearish and are often early to move in new trends.

5. A 5 year cycle has hit with the March highs. 

It is certainly true that markets can do anything at anytime and just because there is evidence that many stocks appear to be entering a bear phase, it does not mean that all of them are.  At this time, I think it would be prudent to keep tight stops on positions.

For anyone looking to short, I suggest picking some that already have 50 week moving averages that are flat or have turned down such as ANF, BAC, BBY, C, EWJ, EWZ, FXI, GM, HD, IBM, JCP, JPM, NKE, RIG, SHLD, T.

In regards to recommendations from my last update, BIDU hit the 165 target and FB it 63.5, just shy of my 64-66 target range.  CSCO moved up a bit but did not shoot up in a 3rd wave, so I have sold 2/3 of my position and am maintaining a stop around 20.90 for the rest. 

Trade at your own risk.  I am not a professional.

CSCO, VLO, BIDU and FB update

VLO ran up into the range I mentioned topping recently around 53.7 and dropping back down in what looks like a 5 wave.  This brings into question whether it will stay below 55, so this downside play is on hold until a proper turn in momentum is seen.

Cisco did come down to 22.5 and is looking solid. It may be entering a 3rd of a 3rd elliott wave which would mean rapid movement up to 27 and eventually 30.  There is still a low chance of a quick drop down to 22 but that would be a tremendous buying opportunity if it was rapid because that level has significant support. 

BIDU and Facebook still have some downward momentum but look to be joining in the coming rally with short term targets of 165-170 and 64-66 respectively.

I am not a professional trade at your own risk.

Cisco looking strong in face of weak overall market. VLO setting up for fall. CGI was a big winner.

Cisco has upward trends on daily and weekly charts as well as a series of bullish impulse waves since mid 2011.  While the Nasdaq has shaved off 8% in the last month, CSCO is up around 8%.  Look for pull back to $22-22.50 to buy.  Target is 28-30 over the next few months for around a 25% gain. stop at $21.

On the daily and weekly charts, momentum for VLO is sharply down.  In addition, there are significant divergences on indicators.  The chart below shows a classic and pretty impulse wave down.  I'll be watching for a retrace up to at least 52.5 and possibly up to 54 but then it should turn and go south with a first target of 48 and second of 42 ish.  If we can pick up May 55 puts for 2.50, we should be able to get a triple by selling them for 7.50 in a month or less.  I'll be watching for the turn signal on this retrace.

Updates from the last post...

- RIG broke down through 20 years of trendline support so that trade is over.  If you bought at 47-49 and got stopped out at 42 then that was about a 12% loss.

- IBM made it to 190 as I suggested but is having trouble with 195.  No recommendations now.

- CVX did not make it to 130 so we got stopped out at 120 for a 4% loss.

- Citigroup and BMY both promptly made it to 55 as predicted for 6-8% gains.

- CGI made it up to 24 for a 23% gain.

- And my big love YRCW is still looking good as a long term buy.  After my last post it dropped to my buy range of 12-15.5 and then promptly took off for 27.  Now at 20ish it is still a buy and may drop down to 17.5  for the opportunity to pick up some more.  

I am not a professional. Trade at your own risk.

Picks

Markets appear significantly overbought, but still no clear signs of slowing down so I am focused on the upside though still keeping an eye on some potential bearish plays as a hedge.

Updating from last post, CAT was not actually dead, just in a coma which it woke from and came roaring back up to the target above 90.  It is reaching resistance now and I have no recommendations regarding it.

RIG retrace made its way down to about 47 but has turned back up and should be taking off for long term bullishness as mentioned in previous posts.  It is a buy!

IBM got down to 172, just above my target of 170 and now is in a strong up trend with next resistance at 190.

CVX bounced around since the last post making it down to 118 ish but now is back up to 125 and still should hit target of low 130's. Stop at 120.  Citigroup and BMY both are showing signs of running up in an elliot wave 5 on Daily charts with targets of about 55.  Stops at 51.40 and 52.40 respectively.

CGI is Celadon Group, a trucking company trading around 19.4.  It is bouncing up from 10 month trendline support and is a buy with a target of 24.  Stop is at 18 so risk/reward is about 3 to 1, 7.5% loss vs 25% gain.

Also in trucking is our old friend YRCW.  It had a big retrace down to 7.5 and popped back up to 20. Trading around 17 now.  It is a buy from 15.50 down to 12 though one might have to endure some high volatility on this one since there is a gap way down at 8.70. Long term I think this has great potential.

Summary... CGI, RIG and YRCW long term buys.  CVX, Citigroup and BMY short term buys.
I am not a professional.  Trade at your own risk.