Markets are still bound by the larger range from March, but there was a
consolidation breakout on offer from the S&P. It still has overhead
supply to work with, but today's buying registered as accumulation. The
S&P enjoyed a MACD and Stochastic 'buy' along with today's action.
However, On-Balance-Volume still has to trigger a 'buy' signal to turn
all technicals net bullish.
The Nasdaq took out the near term high which had looked a good area for
shorts to work (but is now history). Next up is to challenge 5000, and
then the 'bull trap'. (more) Please share this article
Eric Nuttall, portfolio manager, Sprott Asset Management
FOCUS: Oil & Gas stocks & small-cap Canadian equities
Oil and energy stocks have likely seen their worst days as most
potential negative news is now out and fully digested by the market. The
over-supply of oil is being rebalanced from stronger than expected
demand growth in the U.S., flattening-to-then falling US production
potentially weaker-than-expected production growth in non-North America
non-OPEC countries (Weatherford suggesting 1.5 to 2 million Bbl/d drop
in 2016 over
2015). The oil market could potentially be undersupplied in 2016 unless
oil rallies to allow increases to global capex budgets from their
levels. In short, the worst is likely over and now is the time to be
adding exposure to the energy sector.
In non-resource small cap land valuation multiples, especially in the
healthcare and technology sectors, continue to expand and in some
fully valued relative to their earnings growth rates. As oil and by
extension energy stocks increase in favour in the second half of 2015,
money flow could
leave these overvalued sectors resulting in pockets of unexpected
weakness. Additionally, opportunities exist in some “quasi oil stocks”
that were weak in
late 2014 and early 2015 on concerns that weak consumer spending in
Western AB would impact earnings. (more)Please share this article
$FB (Facebook Inc.: NASDAQ) recently roared above the $80 level to mark a new all time intraday trading high of $86.07.
$FB : Facebook Inc.
looking at the two hour chart we can see that the bulls really picked
up the pressure as soon as the stock broke above $81 in mid-March, as
noted by the blue arrow. Historically, this had been a tough level for
the bulls to maintain the price above.
The momentum push higher
was confirmed on the hold and subsequent rise above $82. By late morning
on 3/24/15, $FB traded just above $86. From this point forward, the
decline in +DMI and crossover of the MACD line below the signal line
indicated exhaustion on the part of the bulls.
We can see that $FB
has since pulled back to digest the latest gains, closing at $82.32 on
4/7/15. The ADX line is not rising, so there is no trending move in play
at this moment over the two hour time frame. However, it is clear that
+DMI and -DMI are taking turns in overlapping, so the bulls and bears
are in the midst of a tug of war to determine who will move the stock in
a big way next.
The $83 and $84 levels seem to be resistance for
the bulls to overcome in the near term, with support at the breakout
level around $81. If the MACD line crosses above zero and can hold above
the signal line, a bullish continuation move may be in play. This would
be further reinforced by a rising ADX line and spike in +DMI.
This chart takes a look at the Shanghai Index over the past couple
decades. As you can see, this index has remained inside of a
well-defined rising channel.
From 2007 to 2014, this index had little to brag about, as it lost
about two-thirds of its value in that time. The large decline took the
index from the top of this channel (resistance) to bottom of this
channel (support) in a five-year span. The index broke above a four-year
falling channel on a breakout above Line 1. (more)