Tuesday, May 26, 2015

Gold Miners Fail at 200-day Moving Average

Last week we wrote that the precious metals complex had not broken out yet and had more work to do before it could attempt a true breakout. The metals had some more upside and so did the shares. However, the poor performance of the shares this past week could warn of a larger reversal.
We thought the gold miners could rally up to resistance at the 400-day moving average. Instead of pushing a bit higher, their rally reversed course at the 200-day moving average. Note the action since last summer. The miners had a strong rally up to the 400-dma and later recovered to both moving averages when they were quite close in January. This recent rally did not reach the 400-dma and that signals weakness.

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Stocks to Watch: EYES, RMBS, BITA, AAPL, CHK, HIMX

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Second Sight Medical Products Inc (NASDAQ:EYES) The stock closed on Friday above its major EMAs with high volumes gaining 10% over its previous close indicating accumulation of the stock at current levels. The stock appears positive on daily charts and may move up to 15 once it breaks above previous pivot high. The technical indicator ADX is showing a sign of strength, with the +DI line above the -DI line. Further, the RSI is turning up from its support level, while the MACD is showing signs of bottoming. I will watch the stock price next week and add more above Friday’s high.

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Rambus Inc. (NASDAQ:RMBS) has an interesting daily technical chart and could have another bigger move soon. The break of the next key horizontal resistance line with heavy volume should be the next buy point. If price clears resistance at $14.58, the next move may be powerful. The outlook for stock remains positive supported by the major EMAs and momentum indicators. Strong support for the stock exists at 14.08.

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Shares of Bitauto Hldg Ltd (NYSE:BITA) have room for a significant uptick beyond these levels. Volume starts to pick up again. A move above $65.77 could trigger a sharp move higher. Long set-up on watch.

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Apple Inc. (NASDAQ:AAPL) may be setting up to make new highs next week. Next buy area is when the stock clears 133.98 on heavy volume. From a technical standpoint momentum indicators are in bullish zones. The daily MACD is moving above its signal line in positive territory, while RSI is moving up above its 50% level. All major EMAs are rising and the stock is trading above them. For now the bulls remain in control.

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Chesapeake Energy Corporation (NYSE:CHK) should be at the top of your radar screen next week. The 50-day EMA has been proved to be a strong resistance. More times the resistance has been tested, there is good chance for breaking above that point. Technically speaking, I feel that there is a possibility for CHK to go beyond $15.41 next week. Carl Icahn has steadily increased his stake in this name.

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Himax Technologies, Inc. (NASDAQ:HIMX) is finally stepping up after weeks of frustration. The price is building momentum and broke yesterday the downtrend line that it established since January on high volumes with 7.05 as the first upside objective.
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Aecom (NYSE: ACM)

AECOM provides professional technical and management support services for public and private clients worldwide. The company operates through two segments, Professional Technical Services (PTS) and Management Support Services (MSS). It offers planning, consulting, architectural and engineering design, and program and construction management services for a range of projects, including highways, airports, bridges, mass transit systems, government and commercial buildings, water and wastewater facilities, and power transmission and distribution. The company also provides program and facilities management and maintenance, training, logistics, consulting, technical assistance, and systems integration services primarily for agencies of the U.S. government. It serves transportation, facilities, environmental, energy, water, and government markets.
Take a look at the 1-year chart of Aecom (NYSE: ACM) below with my added notations:
1-year chart of Aecom (NYSE: ACM)
Over the last 8 months ACM has formed an inverse head and shoulders reversal pattern (green). I have noted the head (H) and the shoulders (s) to make the pattern more visible. The stock’s neckline resistance is at the $34 level (Red). ACM will confirm its H&S by breaking through the neckline.
Keep in mind that simple is usually better. Had the inverse H&S pattern never been pointed out, one would still think ACM was moving higher simply if it broke through the $34 resistance level.

The Tale of the Tape: ACM has formed an inverse head & shoulders pattern. A long trade could be entered on a break through the $34 level.
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Chart of the Day - Corium International (CORI)

The Chart of the Day belongs to Corium International (CORI).  I found the stock by sorting today's All Time High list for the stocks with the highest technical buy signals, then used the Flipchart feature to review the charts.  Since the Trend Spotter signaled a buy on 4/29 the stock gained 42.7%.

Corium International, Inc. is a commercial-stage biopharmaceutical company. It is focused on the development, manufacture and commercialization of specialty pharmaceutical products that leverage advanced technologies in transdermal and transmucosal delivery systems. Corium has developed six marketed products in the prescription drug and consumer markets: Clonidine Transdermal Delivery System for hypertension, Fentanyl TDS for chronic pain and four Crest Advanced Seal Whitestrips products. The company has two proprietary transdermal technology platforms with applications in multiple drug categories and indications: Corplex(TM) and MicroCor(R). Corium International, Inc. is headquartered in Menlo Park, California.

technical indicators:
  • Trend Spotter buy signal
  • Above its 20, 50 and 100 day moving averages
  • 15 new highs and up 48.67% in the last month
  • Relative Strength Index 78.72%
  • Barchart computes a technical support level at 11.04
  • Recently traded at 12.89 with a 50 day moving average of 8.52
Fundamental factors:
  • Market Cap $232.92 million
  • Revenue expected to grow 1.70% this year and another 26.60% next year
  • Earnings estimated to increase 14.50% this year and an additional 30.60% next year
  • Wall Street analysts issued 3 strong buy recommendations on the stock
The most reliable technical trading strategy for this stock has been the price vs the 100 day moving average.
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Trade of the Day: GPRO Stock Mounting an Uptrend

GoPro Inc (NASDAQ:GPRO) — Shares of this maker of wearable and mountable cameras have risen more than 44% off their year-to-date lows from early March, yet my social media indicator doesn’t flash a whole lot of exuberance about the stock. But it looks like the sharp decline from the October highs to the March lows has shaken out the last of the weak hands.
When GoPro announced quarterly earnings on April 28, it blew away estimates, reporting a 54% year-over-year jump in sales and a 149% increase in earnings. Gross profit margin rose to 45.1% from 40.9% in the year-ago quarter. This was unsurprisingly followed by a slew of bullish analyst notes.
Looking at the chart of GPRO stock, after the strong rally from last summer/autumn, gravity set in by October, and shares were off 62% when all was said and done in March. With the bulls flushed out, the stock began to signal downside exhaustion and consolidate with an upward bias.
Following the April 28 earnings report, GPRO stock rallied nearly 13% the next day, leaving behind a notable up gap that also pushed the stock back above its 100-day simple moving average (blue line).
Over the ensuing five trading days, shares quickly fell back down and fully filled the April 29 up gap. In a show of strength, however, GPRO stock again began to rise, all the while holding marginally above the 100-day moving average. Filling the gap also served as a retest of a previous mini-resistance area near $47.
Earlier this week, GPRO stock managed to marginally push back above the post-earnings rally high, which also brought shares up to the next horizontal resistance line around the $54.50 area. It looks like the strong earnings report has changed the direction back up. Active investors should look to buy GPRO stock on a move above $54.50 for an initial target in the $60 area in the coming month.
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