[Trading] Technical Analysis Journal

Yeah, the plan for me was to load up on an intra-day breakout for a quick day trade, which never materialized. Instead it gapped above its highs a couple of days ago. Good job staying in.

 

I've been in from 5.90-6.25. I am not really looking for a 15% move though. From the outset I saw this as a Cup and Handle formation. I called this pullback at 6.8, to complete the "handle". I mention this in multiple previous posts. The breakout of this pattern will be at 7.0. The completion of this pattern measures to 12-14. That is how much I am looking to make, if it pans out.

 

So, let me talk a little about GLD. I did mention it in one of the first posts in this thread, so I guess this is more of an update.

Honestly, not much has changed since then. GLD is still below 100, and now may be on its way to hit it for a 5th time. The reason I am excited about this trade now, and bringing this up is because stocks/commodities simply don't hit resistance 5 times and not break. There is such thing as a double top, maybe a triple top, but once you continuously hit resistance over and over again, it is on the verge of breaking.

Below is the weekly chart of GLD. As you can see, it is still confined by the neckline in a massive reverse Head & Shoulder. Neckline is at ~97-~100. Notice how every time the price action spiked to the highs, hitting this neckline, it is accompanied by a volume spike/increase. Volume at its highs indicates Buyers are pushing it up. It is only a matter of time before they break through the Sellers.




Below is a daily chart of GLD in the last 6 months. It is making lower highs, and higher lows, all the while volume has dried up. This is a classic consolidation pattern. What it means is: Buyers are more hesitant to buy, and Sellers are more hesitant to sell. This is why the range is getting smaller and smaller, meanwhile volume decreases because less people are willing to commit to either side. Once it breaks either way, all the hesitation and uncertainty will be gone. If it breaks to the upside, all the unsure buyers will finally Buy, while the sellers will hold off, causing a surge up. Vice versa for the downside. I am willing to bet it will be the first scenario, because resistance simply does not get hit this many times without breaking. In any case, I won't commit any money of real significance until the breakout is confirmed. Above 97-100 on high volume. A breakout measures to ~140-150 if successful.




The US Dollar generally has an inverse relationship with Gold. It has already broken down around 4 months ago at ~85, which is ~25.5 on the UUP. Meanwhile the GLD still has not broken above its own resistance, maybe it has some catching up to do? Recent volume on the UUP is a little concerning. There has been some big volume to the upside. However, if you look at price action, it is still confined in a pattern of lower highs, lowers lows. As long as this continues, there shouldn't be too much trouble for GLD.




So to conclude, the plan is simple: Buy on a breakout of ~97-100 on strong volume confirmation. Look for a move to ~140-150. I am already in some, on days I thought were a good buy. This however is a small position, a preemptive strike, just so my average won't be terrible if we shoot straight through 100.

Trade carefully, and good luck.

 

UPDATE on previous trades:


First let me just say, I really don't want any of you to just take my word for any thing I say. Please be skeptical. For every trade that I update, I've already written a plan of action in a previous post. Please go back and check what I wrote, and see for yourself how they turned out. Don't say to me: "How could you give a $170 stock a .50 cent stop, and not get hit. You must be BSing!" When 10 days prior, I already noted exactly what price I was going to enter. I am really putting myself out there by stating my entries, exits, and stops all before hand. So don't take my word for it, go check for yourself.

I am out of most of my positions this week and last, here's how they fared.

CHLN: Broken below 20 EMA. Stopped out.

Bought- 4.7 Sold- 5.9.

JCP: Surprisingly, this actually worked, kinda. My stop at ~28 was never hit, and it rallied to almost 35. I am out most of my position on 8/10.

Bought- 28.8 Sold- 33.94.

FSLR: It got back up to 175.88 before earnings, which is .17 cents below my previously stated stop. Luck? Or just good? I'd rather be lucky than good I guess. This is a trade that you should really go back and read my first post regarding it. I had a plan, and did not deviate one iota.

Short- 175.5 Bought- 149.80

BCRX/NVAX hedge: The plan was to short BCRX to hedge my long position in NVAX. In the end, NVAX was up a little, while BCRX actually declined, which means even though it was a hedge, I was profitable on both sides. I covered BCRX yesterday when it diverged from NVAX.

BCRX Short- 10.0 Bought- 9.65.

___________________________

These trades I am out of, so this will be the last time I update them. I will keep you guys posted on what I do with GLD. Also looking for other new setups.

Good luck.

 

Take profits on half your position here, I wouldn't hold on to all of it because the rise is due to just a rumor for now. For the other half you can hang on and give it a slightly lower stop to see what happens. Maybe ~19.90.

Good job on a great trade.

 

UPDATE:

NVAX appears to be on its way again after two weeks of consolidation. The volume really tells the story of where they want to take this stock- with volume spikes on up days and volume drying up during retracements.

Others in the sector: BCRX, VICL, SVA, APT, INO

I will be active in this sector as long as the situation with swine flu remains uncertain. This will last until October-December, the heart of flu season. By then we will have a clearer picture of the seriousness of this pandemic. If it is weaker than expected, these plays will be over. If it is bad, then hopefully we can make some money, before we die.

 

What do you mean by time estimate? Like when will it break up/down? I can't say for certain, but as the range gets compressed narrower and narrower, a break should be imminent.

Look for a break of ~97-100 on the upside, ~89 on the downside.

 

If you had followed my advice you would have gotten out of half at 22, and the other half stopped out at 19.90. So your average would have still been ~21, with a chance of seeing where it was headed next.

 

SVA had a big day after its vaccine was approved in China today. There is no trade here at this point, just another in the sector that has gone vertical.



INO is an extremely speculative name in the sector. It was an unknown name until recently, when it announced positive findings in a clinical study. This is all besides the point anyways, since fundamentals is more useless than usual in these cases, as profitability for these companies are years away. Right now they are all trading on hype and fear.

I like the volume and price action for INO, and believe it is setting up for a move higher. Since gapping up on extreme volume a month ago, it has consolidated around 2.0. In the last 21 trading days, it has only closed above its open on 3 occasions. This is because it has much excess to work off after rising 400% in one day. For longs holding since <1.0, most are taking profit now, causing all the red bars. On the other hand, the volume on its up days are extremely disproportionate to the down days. This tells me that once the weak hands are done taking profits, this stock will be ready to break out. There are signs of this in recent action, as it has gingerly broken the down trend line. A few big up days on high volume, and closes on the highs will give the all clear signal.

I am long INO from 2.05 with a stop at ~1.90-1.98. It is currently at 2.19, which is not too extended for you to enter.

 

Today.

 

So this is another bump for emphasis. $100 may be the "psychological" resistance, but the REAL resistance was broken today. It is a significant turning point for Gold, and it is time to enter.

Like I mentioned before, I had some small positions entering the day, but put on the majority of my holding today during the 10:40am breakout. This came on dramatic volume, and looks like the real deal. We might get a small pullback tomorrow after today's big day, but the pattern would still be in tact. This move measures to a high of $140-$150.

Obviously nothing in trading is guaranteed, so trade carefully and good luck.

PS. One thing making me wary about this trade is how hard the Fast Money talking heads are riding Gold right now. I don't like that. Hopefully it is just a case of a blind squirrel finding a nut.

 

Sorry I have not updated in quite awhile, been very busy. Hopefully some of you read this and jumped on the bandwagon, as Gold is trading at an all time high at the moment. As predicted, $1000 was a sucker's trade. There was only congestion there, as everyone and their mother was watching and tried to trade it through supposed "psychological resistance", then subsequently bailed once it broke below it. Multiple times. The Real breakout was the pennant at $960, with a clear and defined vertical move coming afterward.

Anyways, if you are not in already, I would be buying on all pullbacks. I still plan to add to my position any chance I get, as I believe this rally will have some long legs.

Also a word of caution to you guys still in the stock market:

I called for a "Labor day massacre" which may have been a week too early, and a bit tongue in cheek. The stock market is currently being propped up by a weak dollar. This is fool's gold.(no pun intended) It might go a little higher, it might not, I am not sure. However I am sure that Gold will outperform the market. Also I am sure that soon people will start realizing a weak dollar is not bullish for stocks in the long run. Once reality sets in, we will be in for a severe correction. In fact, I believe we will eventually take out the lows and head much lower- unless high inflation comes sooner rather than later. In that case, the market would still head much lower in real terms, just not nominally. When will this happen is anyone's guess. We might be in the mist of it, or we may head higher first. Irrationality can be very persistent thing in the stock market. In any case, put your money in Gold as long as this breakout is intact.

Also if you are looking for a safe trade:

Long GDX AND Short IYR, with the same amount of money at the same time.