Tuesday, March 17, 2015

How to Prepare for the Biggest Oil Collapse in Nearly 30 Years: CAE, MG.A, CAE, MG

Over the past couple of months, there’s been a general belief that oil prices have bottomed out at US$50 per barrel. There’s also been a belief that prices will rebound, perhaps in the second half of this year. After all, producers are cutting back on drilling, and low prices may lead to increased demand.
Those forecasts are not looking too good right now. Despite reduced drilling, production remains very healthy. Demand has not been able to pick up the slack. The oil price has fallen to US$43, well below the supposed US$50 support level, and there’s plenty more room for this number to fall. (more)

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$VSLR Breaks Out Above $10

$VSLR (Vivint Solar Inc; NYSE: VSLR) broke out from a several month trading range last week, closing Friday above $10 for the first time since early December 2014.

$VSLR : Vivint Solar Inc.
In evaluating the price action, we can see from both the daily and weekly charts that the $8 level served as an essential support area, while the $10 level had been a formidable ceiling that finally was pierced on a heavy volume breakout last week following a positive earnings report.

The rising RSI signal over the past few months was an indication that $VSLR bears were losing momentum, despite the limited price range that the stock traded in; essentially, the bears were unable to take the stock much lower than $8, and this allowed for a prolonged period of accumulation of shares by the bulls.

Moving forward, the $10 level will now be one to watch on any pullback in the price. If the bulls can hold this, then I would not be surprised to see $VSLR push towards the $13 - $14 level in the intermediate term, assuming the $12 level can be overcome first.

The weekly chart shows that $VSLR has had a predominantly lackluster performance since its Fall 2015 IPO. However, the tide may be turning in favor of the bulls now; with a market cap of just over $1 billion USD, $VSLR is still valued far less than its solar energy peers such as $SCTY (SolarCity Corp.; NYSE: SCTY), which Wall Street currently values at around $5 billion.
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Bullish Biotech Stocks CLDN Celladon, QURE Uniqure – Charts Trading At All Time High

These are two extremely bullish looking Biotech stock charts. Both are trading near their respective all time high. I recently posted them on Twitter and wanted to highlight them:

CLDN – Celladon

CLDN recently gapped above its all time high. From a purely technical perspective this is the most bullish price behaviour you could possibly ask for. It goes without saying anything can happen with Biotech stocks. That’s why you should never bet the farm on any single stock. Get exposure to lots of bullish set-ups and let the market do its thing. That said, the gap up has to be considered a break-away gap which implies potentially much higher prices down the road.

QURE – Uniqure

QURE is one of the strongest Biotech charts around. In order to qualify as ‘one of the strongest’ it obviously has to trade near its all time high. From a purely technical perspective, trading near the ATH is bullish behaviour.
Conclusion: When it comes to technical analysis it is best to keep things simple. When I am dealing with charts like the ones above this is what I always keep in mind:
In uptrends, surprise moves tend to be to the upside.


KBR, Inc. operates as an engineering, construction, and services company worldwide. The company operates through three segments: Technology & Consulting, Engineering & Construction, and Government Services. The Technology & Consulting segment offers various services and solutions, including licensing, engineering and design, proprietary equipment, plant automation, catalysts, and related consulting services to hydrocarbons, chemicals, and fertilizer markets. The Engineering & Construction segment provides engineering and EPC services for the development, construction, and commissioning of projects in the offshore, onshore and liquefied natural gas, and gas-to-liquids markets; and liquefaction, regasification, floating LNG, and floating storage and regasification units. The Government Services segment offers construction, refurbishment, operations and maintenance of housing, and other facilities for military personnel, as well as operations support, embassy and other life support programs, heavy equipment transportation, and police facilities management integration services.
Take a look at the 1-year chart of KBR (NYSE: KBR) with the added notations:
1-year chart of KBR (NYSE: KBR)
KBR has been in a solid downtrend over the last year, which may or may not be over, while finding support at $15 (green) over the last 3 months. Now that the stock is there again, traders should be able to expect some sort of bounce. However, if the $15 support were to break, much lower prices should follow.

The Tale of the Tape: KBR has a key level of support at $15. A trader could enter a long position at $15 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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