Wednesday, August 19, 2015

Buying and Trading Levels for Amazon $AMZN (AMZN) developed a Gap and Consolidate…then Rally Pattern through 2015 as drawn.
After an initial earnings gap, shares consolidate and support on rising moving averages.
The next swing or pathway has been an upward rally into the future.
We’re balancing the odds of this pattern repeating a third time on the July gap and consolidation.
If so, notice the support reversal candle off the $520.00 per share level at the rising 20-day EMA.
We’ll be bullish above the $520 pivot and breakout trigger bullish above $540.
A bearish sell pathway develops under the 20-day EMA near $520.  (more)

It’s Almost Time To Buy Crude Oil Again

It’s been a while since I’ve written about Crude Oil here on the blog. It’s a topic that has been coming up more often recently as prices are hitting levels not seen in over 6 years. Just because something is in the news a lot doesn’t mean it is a market that is worth our participation. In fact, more often than not, if it’s all over the news, you probably either missed it, or you’re too early. We have preferred to stay away from Crude Oil since it broke the uptrend line from the March lows. This occurred in mid-May after a 30% rally in Crude Oil that was sparked from the failed breakdown and bullish momentum divergence that we were pointing to in March. This worked out well the first time around and now I believe we are about to see something similar.  (more)

Keep Your Eye on Junk Bonds: They’re Starting to Behave Like ‘08

According to data from Bloomberg, corporations have issued a stunning $9.3 trillion in bonds since the beginning of 2009. The major beneficiary of this debt binge has been the stock market rather than investment in modernizing the plant, equipment or new hires to make the company more competitive for the future. Bond proceeds frequently ended up buying back shares or boosting dividends, thus elevating the stock market on the back of heavier debt levels on corporate balance sheets.

Now, with commodity prices resuming their plunge and currency wars spreading, concerns of financial contagion are back in the markets and spreads on corporate bonds versus safer, more liquid instruments like U.S. Treasury notes, are widening in a fashion similar to the warning signs heading into the 2008 crash. The $2.2 trillion junk bond market (high-yield) as well as the investment grade market have seen spreads widen as outflows from Exchange Traded Funds (ETFs) and bond funds pick up steam.  (more)

SolarCity Corporation (NasdaqGS: SCTY)

SolarCity Corporation designs, manufactures, installs, maintains, monitors, leases, and sells solar energy systems to residential, commercial, government, and other customers in the United States. It offers solar energy systems; solar lease and power purchase agreement finance products; mounting hardware for photovoltaic panels; and related software, as well as develops a proprietary battery management system, which is designed to enable remote, bidirectional control of distributed energy storage that can provide benefits to customers, utilities, and grid operators. The company also sells electricity generated by solar energy systems to customers.

Take a look at the 1-year chart of SolarCity (NASDAQ: SCTY) with the added notations:
SCTY has been trending sideways since the fall of last year. Along the way, the stock has repeatedly found support around $46 (green). Now that the stock appears to be falling back down to that support level again, traders might be able to expect some sort of bounce. However, if the $46 support level breaks, lower prices should follow.

The Tale of the Tape: SCTY has an important level of support at $46. Traders could enter a long position at $46 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.