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Liam Garrity-Rokous
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My name is Liam Garrity-Rokous and I am currently a sophomore pursuing a Bachelor of Science in Management, with a dual concentration in Finance and Corporate Reporting & Analysis, at Boston College in the Carroll School of Management (CSOM). I have been interested in the stock market for... More
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  • Gold And Silver Technical Analysis Charts

    NOTICE: IF YOU ARE JUST VISITING THIS PAGE NOW, PLEASE SCROLL DOWN AND FIND THE MOST UP-TO-DATE CHARTS WHICH SHOULD BE TOWARDS THE BOTTOM OF THIS INSTABLOG POST. MOST RECENT CHARTS INCLUDE PRICE DATA THROUGH 10/08/14.

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    Gold recently broke support at $1,240/oz, and it is in danger of breaking the multi-year low it set in June 2013. The situation is critical right now, because a break of the June 2013 low (at $1,179.40/oz or approximately $114.50 for GLD) could cause a technical selloff that would put the yellow metal in danger of falling to $1,000/oz.

    In this Instablog, I will be monitoring the weekly (and daily if necessary) movements of gold and silver to determine if it looks like technical support is about to break. Monitoring the current situation is extremely important for all gold/silver investors, because it would appear as though the direction of the two commodities is mostly being determined by technical analysis (clearly no one is paying attention to long-term fundamentals).

    I am long-term bullish on the fundamentals of both gold and silver, however, I believe that it would be folly to forget to watch price action right now. I wrote a Seeking Alpha article about the long-term fundamentals of gold in which I stated my prediction for gold going forward. The article was stated my prediction and was titled "Gold Bottomed In 2013 And Is Now Headed Higher." I think it is pretty clear what my prediction for gold is based on that title.

    Below you will find charts that show the price of gold (or GLD) and silver (NYSEARCA:SLV). The charts use various technical analysis indicators and they will be updated weekly (or intra-week if necessary). All of the charts that I include below will be from either my Tradesation platform or from StockCharts.com (free charts), and I will often include a chart from both in the same time frame to offer varying images. I will always include the source of the charts below the pictures.

    If there are any charts, or technical indicators, that you would like me to include please let me know and I will include them ASAP. Please give me a few days from the time that this Instablog post was created to add all the relevant charts.

    Lets start some easy ones:

    GLD and Gold in weekly time intervals

    (click to enlarge)

    Source: Tradestation Platform

    GLD broke support at $119.50 ($1,240/oz for $GOLD). This was also the 76.40% retracement level in GLD's current trading range (low in late June 2013 to high in late August 2013). See below for an alternative view of gold using data from stockcharts.com.

    (click to enlarge)

    Source: Stockcharts.com

    Gold's next major support level is at $1,200/oz. You can also see that gold has a lot of overhead resistance from the 50 Week Moving Average (thin blue line), and the downtrend line (in red). The question now is will gold's low in 2013 hold? I believe that it will.

    SLV in weekly time intervals

    (click to enlarge)

    Source: Tradestation Platform

    I apologize for the scaling of this chart. It is almost impossible to accurately scale a chart for SLV and still include its high in 2011. I decided to use a different range for the Fibonacci retracement lines in this chart than I used in the chart of GLD (above), because it looks better and it provides a more accurate price range. Notice how the 76.40% retracement (at $18.16) was also broken this past week. SLV's intra-week low was actually at $17.76, which is only $0.01 above its low in June 2013! I added a downtrend line in red and the support line at $17.75. SLV NEEDS to rally next week if it has a chance of holding the $17.75 region. SLV's is currently forming a QUADRUPLE BOTTOM and we will just need to wait and see if support is able to hold. If support is not able to hold then we will see $17 come up very quickly.

    See below for a chart of silver to help provide provide an alternative view of the data presented above.

    (click to enlarge)

    Source: Stockcharts.com

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    UPDATED GOLD (NYSEARCA:GLD) & SILVER (SLV) CHARTS ON 9/20/14

    (click to enlarge)

    Source: Tradestation Platform

    (click to enlarge)

    Source: Stockcharts.com

    (click to enlarge)

    Source: Tradestation Platform

    (click to enlarge)

    Source: Stockcharts.com

    Final Summary (on 9/20/14):

    This past week was very hectic for both gold and silver. Silver broke major long-term support at $18.00/oz and set a lower low than its low in June 2013 (approximately $18.15/oz). I used Fibonacci retracement lines in a chart of SLV to try to predict where SLV's next support might be. As the chart of SLV above shows you, SLV's 76.40% retracement is at $16.60, which is $0.61 lower than its closing price this week. I updated many of the trend lines in the charts above to present a more accurate picture of both gold and silver's current trends.

    Silver is now even more oversold than gold and, as you can see in the chart of SLV from my Tradestation platform, the 10-week Money Flow Index indicator is now showing 0.00 for SLV! I have never seen that happen before. For those of you who may not know exactly how the MFI indicator is calculated, the following description from Stockcharts.com should help:

    There are a several steps involved in the Money Flow Index calculation. The example below is based on a 14-period Money Flow Index, which is the default setting in SharpCharts and the setting recommended by the creators.

    * 1. Typical Price = (High + Low + Close)/3* 2. Raw Money Flow = Typical Price x Volume* 3. Money Flow Ratio = (14-period Positive Money Flow)/(14-period Negative Money Flow)* 4. Money Flow Index = 100 - 100/(1 + Money Flow Ratio)

    I use a 10-period Money Flow Index, because I think it is more accurate, but it really is all up to personal preference. Just so you all know, the 14-period Money Flow Index for SLV is now 30.86, which is no where close to as oversold as the 10-period Money Flow Index is showing. The reason why the 10-period Money Flow Index is showing a reading of 0.00 is because SLV has declines for 9 out of the past 10 weeks, with the its only positive week being an extremely small increase. That is extraordinarily rare and it directly coincides with data shown by the US Dollar Index (see below).

    The question on every potential gold/silver bull's mind: When will a rally in gold and silver prices take place, because nothing goes down forever right? I believe that a rally in gold and silver could take place at any time, but it will likely coincide with at least a short-term top in the US Dollar, which has experienced a huge rally over the past two and a half months.

    Here's a chart of the US Dollar Index:

    (click to enlarge)

    Source: Stockcharts.com

    The US Dollar's rally has become almost vertical in the past few weeks and it has now gone up for 10 weeks in a row. This has caused it to become extremely overbought, and it now has a 7-Week RSI value of 94.80!. The US Dollar's rally has put pressure on gold, which you can see by the fact that the US Dollar Index has had an increasingly negative correlation to gold over the past 20 weeks (see bottom indicator in chart above). The US Dollar is now at major long-term resistance, and it will be very interesting to see if the dollar will be able to break this resistance level.

    I am a contrarian, and I believe that it soon be a good time to buy gold and silver. However, the best time to buy might not immediately be next week, because it appears as tough both gold and silver are seeking out major long-term support and they both won't stop until they reach it. The same is true of the US Dollar Index, except in reverse (obviously). The US Dollar Index seems destined to truly test its long-term resistance at 85.00, and I believe that a test of that high will likely happen this upcoming week. Furthermore, I believe that we could see a few more days of declines, but a rally in gold and silver appears to be approaching quite quickly. After a rally begins, we will need to closely watch technical "momentum indicators" (like RSI and Full Stochastics) to see if the rally looks sustainable. If the rally is not sustainable, it becomes increasingly more likely that gold and silver will not be able to rally for long and they will eventually decline again to re-test their multi-year lows.

    Based on how oversold silver is right now, I would say that silver (and silver-related mining companies) are a better technical buy than gold (and gold-related mining companies) going forward, because they will likely experience a stronger bounce due to their exceptionally oversold status.

    That's all for now! If you have any questions, please feel free to ask.

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    ADDED: GDX AND GDXJ CHARTS ON 9/22/14

    I decided to post some charts on GDX and GDXJ, seeing as they are also at critical levels right now. I have no new updates for the gold (or GLD) and silver (or SLV) charts right now, because they are just continuing their current downtrends towards the support regions mentioned before.

    Here's some charts for GDX and GDXJ (daily time intervals):

    (click to enlarge)

    Source: Stockcharts.com

    • Note: This chart uses two years of data (daily time intervals).

    (click to enlarge)

    Source: Stockcharts.com

    • Note: This chart uses two years of data (daily time intervals).

    Charts For GDX and GDXJ (weekly time intervals):

    (click to enlarge)

    Source: Stockcharts.com

    • Note: This chart uses three years of data (weekly time intervals).

    (click to enlarge)

    Source: Stockcharts.com

    • Note: This chart uses three years of data (weekly time intervals).

    Final Notes: All of the four charts above use intra-day data, and the charts were created before 12:30pm on 9/22/14. All price discrepancies are due to the fact that the charts were created at different times during the day.

    Final Summary (on 9/22/14):

    As one would expect, the charts above are very similar. It should be noted that the charts for GDXJ look better than the charts for GDX, because (as mentioned in the chart's notes) GDXJ set a "higher high" in July while GDX did not. Both GDX and GDXJ are very oversold on both their daily and weekly charts and, like GLD and SLV, they will likely bounce within the next 1-2 weeks. We want to see GDX hold support at $21.75-$22 and GDXJ hold support at $32.50 (approximately) for both charts to remain constructive. If those two support levels break, GDX and GDXJ will likely be headed lower (to the $20 region and $29-$30 region respectively). Additionally, if those support levels break both GDX and GDXJ will be setting "lower lows," which is the basic definition of a downtrend. Seeing both ETFs are trying to find a bottom setting "lower lows" would not be constructive price action.

    Both GDX and GDXJ are currently setting "double bottom" chart patterns, which is very constructive for forming a bottom. However, risk is elevated at this time and traders who are looking to go long would probably find the lowest risk entry point by waiting for both GDX and GDXJ to form a "swing low" (higher high for current bar than the high for the last bar) on the weekly chart. Therefore, they will likely have to wait until next week (at the earliest) for a low-risk entry point. If traders do not wait for the "swing low" they risk catching a falling knife (so to speak)

    • Note: The information above pertaining to low-risk entry points and a "swing low" mainly pertains to "swing traders" and not day traders or long-term oriented investors.

    That's all for now folks! If you have any questions, please feel free to post them here.

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    ADDED: USD & GOLD SENTIMENT CHARTS

    News from Mario Draghi sent the Euro down today, which allowed the USD to continue its incredible climb. However, the USD looks like it is very close to a major top. Investors should always look at multiple "indicators" when making an investment decision, especially one in an emotion-driven market like precious metals. One indicator available for people to look at is sentiment. Here's a chart that shows the current sentiment for the US Dollar Index:

    (click to enlarge)

    Source: Sentimentrader.com (provided by Geoff from BillCara.com)

    The market is now more optimistic about the USD than it has been since 2000. This is a contrarian indicator because investors should naturally want to sell when others are greedy and buy when others are fearful. Now take a look at sentiment for gold:

    Source: Sentimentrader.com (provided by Geoff from BillCara.com)

    It is very clear, from the two sentiment charts above, which of the two is in "fearful" territory and which is in "greedy" territory.

    ADDED: UPDATED USD, GOLD, AND SILVER TECHNICAL CHARTS

    (click to enlarge)

    Data Source: Stockcharts.com

    (click to enlarge)

    Data Source: Stockcharts.com

    (click to enlarge)

    Data Source: Stockcharts.com

    Final Summary (On 9/25/14):

    Well, it's pretty obvious at this point that gold and silver are extremely oversold. I believe that gold and silver will likely rally within the next week and a half or so, and a rally in precious metals would likely coincide with at least a short-term top in the USD. The only question at this point is this: will the rally be sustainable? At this point, the evidence is pointing towards "NO." Both silver and gold have been unable to find support in recent weeks, and the both have a lot of downward momentum. They also have a lot of overhead resistance zones that they would need to "conquer" for a rally to be sustainable. I will now give you two price levels to watch: $1,260/oz for gold and $19.30 for silver. If the two precious metals are able to break above those levels then we might be able to see a more sustainable rally.

    At this point it seems like gold is destined to re-test the low its set in June, 2013, and I'm not sure that a short-term bounce in gold will be able to stop that from happening. I believe, right now at least, that any rally in gold and silver will likely be short-lived unless we see a the USD make some huge declines. Regardless, I believe that short-term oriented traders will still be able to profit from a bounce in precious metal prices, which will likely be swift and fierce (I'm expecting huge gains in only a few trading days). Most of those price increases will likely be due to short covering, and we will need to watch MFI carefully to see if it looks like investors are beginning to buy in at those price levels.

    That's all for now folks!

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    UPDATED CHARTS FOR GLD AND GDX & COT DATA:

    Updated Through October 08, 2014

    Here are updated daily and weekly charts for GLD (with my own annotations):

    (click to enlarge)

    Data Source: Stockcharts.com

    (click to enlarge)

    Data Source: Stockcharts.com

    ...and here are the updated daily and weekly charts for GDX (with my own annotations):

    (click to enlarge)

    Data Source: Stockcharts.com

    (click to enlarge)

    Data Source: Stockcharts.com

    Also, I wanted to include the following chart that shows Commitment Of Traders (NYSE:COT) data for gold:

    (click to enlarge)

    Source: Geoff Goetz at www.billcara.com

    The chart above was passed along to me by Geoff Goetz at billcara.com, and his annotations are below the chart (he describes what each different colored line represents). As he said, this is very bullish for gold. The data is a little old (the chart was sent to me on September 28, 2014), but it is still very important and this is a bullish intermediate-term fundamental indicator. This data supports the position that gold may be ready to find a bottom here.

    Final Summary (on 10/08/14):

    All of the charts that I just showed you are very bullish for gold for at least the short-term. The fundamental picture looks good and, as you can see from my technical analysis charts on GLD and GDX, the technical picture is also looking very good. The only thing that I would like to see, and I think it is very likely that we WILL see it at this point, is GLD and GDX confirming the "swing low" on the weekly charts by closing above the last bar's high. This means that GLD and GDX would need to close above $117.40 and $22.17 respectively. Additionally, I would like to see both the MFI and the "Accum/Dist" (Accumulation/Distribution line) indicators move significantly higher on the weekly chart. Both of those indicators are delayed on the weekly chart so we will just need to wait and see how both securities' prices close this week.

    I think that there is a high likelihood at this point, given the data I presented, that both gold and silver have set short-term bottoms.

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    My short-term (1-3 weeks) swing trading price targets for GLD, SLV, GDX, and GDXJ (when looking at daily charts) are as follows:

    GLD = $119.40 (+1.64%) then $120.50 (+2.58%) then $123.25 (+4.92%)

    SLV = $17.15* (+2.82%) then $17.75 (+6.41%) then $19.00** (+13.91%)

    GDX = $23.00* (+4.83%) then $23.65 (+7.79%) then $24.50 (+11.67%)

    GDXJ = $36.75 (+6.65%) then $38.25 (+11.00%) then $40.25 (+16.80%)

    Notes:

    * = very short-term price target (price could hit this level in anywhere from 1-5 trading days)

    ** = longer-term price target (price is unlikely to hit target in 1-3 week timeframe)

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    My intermediate-term (3-7 weeks) swing trading price targets for GLD, SLV, GDX, and GDXJ (when looking at weekly charts) are as follows:

    GLD = $123.25 (+4.92%) then $125.25 (+6.62%) then $127.75* (+8.75%)

    SLV = $17.75 (+6.41%) then $19.00 (+13.91%) then $19.85**(+19.00%)

    GDX = $24.50 (+11.67%) then $25.75 (+17.37%) then $27.00 (+23.06%)

    GDXJ = $38.50 (+11.72%) then $41.50 (+20.43%) then $44.00 (+27.68%)

    Notes:

    * = unlikely to hit this price level without a significant "short squeeze"

    ** = if price hit this level in 3-7 weeks a pull-back would be very likely due to extremely fast price increase.

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    Risk levels for all four securities (this would be where one would set a stop-loss price level if one was so inclined):

    GLD = $114.14 (-2.83%)

    SLV = $15.94 (-4.44%)

    GDX = $20.04 (-8.66%)

    GDXJ = $30.24 (-12.25%)

    Note: I added a little extra "wiggle" room in these final cut off stop-loss price levels with the intention of accounting for possible volatility. EVERY INVESTOR SHOULD TAKE THEIR OWN RISK TOLERANCE LEVELS INTO ACCOUNT WHEN FIGURING OUT THEIR OWN STOP-LOSS LEVELS, AND THE PRICE LEVELS ABOVE ARE ONLY INTENDED TO HELP!

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    Short-Term (1-3 weeks) Potential Gain/Loss Ratios For All Four Securities:

    GLD = 3.05/2.83 = 1.08

    SLV = 7.71/4.44 = 1.74

    GDX = 8.10/8.66 = 0.94

    GDXJ = 11.48/12.25 = 0.94

    Notes: All the potential gain figures were calculated by taking the average of the percent return figures from all of the "short-term (1-3 weeks) swing trading price targets. The potential loss figures are simply the "risk level" percentage loss figures seen above.

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    Intermediate-Term (3-7 weeks) Potential Gain/Loss Ratios For All Four Securities:

    GLD = 6.76/2.83 = 2.39

    SLV = 13.11/4.44 = 2.95

    GDX = 17.37/8.66 = 2.01

    GDXJ = 19.94/12.25 = 1.63

    Notes: All the potential gain figures were calculated by taking the average of the percent return figures from all of the "intermediate-term (3-7 weeks) swing trading price targets. The potential loss figures are simply the "risk level" percentage loss figures seen above.

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    That's all for now folks! Feel free to comment below if you have any questions!

    Full Disclosure: I am went long GDX, NUGT, and JNUG on October 08, 2014.

    Sep 12 6:59 PM | Link | 39 Comments
  • Las Vegas Sands: Technical Analysis Update

    NOTICE: IF YOU ARE JUST VISITING THIS PAGE NOW, PLEASE SCROLL DOWN AND FIND THE MOST UP-TO-DATE CHARTS WHICH SHOULD BE TOWARDS THE BOTTOM OF THIS INSTABLOG POST. MOST RECENT CHARTS INCLUDE PRICE DATA THROUGH 9/26/14.

    I wrote this post after being asked by one of my followers, mhchangster, to do an updated analysis on the technicals of Las Vegas Sands Corporation (NYSE: LVS). He asked me to do this in the "Comments" section of my article on LVS, which can be found here: seekingalpha.com/article/2370935-las-veg...

    Here is the technical analysis chart that I included in my article:

    Source: Stockcharts.com

    • Note: This chart only contains data through July 30, 2014

    Unfortunately, LVS broke the support zone indicated in the chart above, so it is quite reasonable to ask for an updated version of the chart.

    Below are pictures of charts that I created, which use technical analysis to provide an updated look at LVS. The charts were created on the free StockCharts.com platform, and on my own personal Tradestation platform.

    Weekly Charts:

    (click to enlarge)

    Source: Stockcharts.com

    • Note: Data for this chart goes up until August 29, 2014. The chart looks at three years of data in weekly intervals.

    (click to enlarge)

    Source: Personal Tradestation Platform

    • Note: Data for this chart goes up until August 29, 2014. The chart looks at five years of data in weekly intervals.

    The chart above uses Fibonnaci Retracement lines. It is interesting to see how those retracement line values coincide with the lines I drew on the StockCharts graph. I drew those support lines on the StockCharts graph before I even saw the Fibonacci Retracement values. I kept the trend lines in there as well.

    Daily Charts:

    (click to enlarge)

    Source: Stockcharts.com

    • Note: Data for this chart goes up until August 29, 2014. The chart looks at one year of data in daily intervals.

    This chart will just give you a quick look at LVS in daily time intervals, for short-term trading.

    (click to enlarge)

    Source: Personal Tradestation Platform

    • Note: Data for this chart goes up until August 29, 2014. The chart looks at two years of data in daily intervals.

    The chart above uses Fibonnaci Retracement lines. Again, it is interesting to see how those retracement line values coincide with the lines I drew on the StockCharts graph. I drew those support lines on the StockCharts graph before I even saw the Fibonacci Retracement values. I kept the trend lines in there as well.

    Final Summary (through 8/29/14):

    The technical picture for LVS does not look good on the daily or weekly charts. Momentum is definitely down in the short-term, and it feels as though LVS is destined to reach its next major support zone (in the $62.50 - $63 region). I plan on accumulating more shares at the support zones indicated in the StockCharts.com charts, especially when those support zones coincide with the Fibonacci Retracement Lines from the Tradestation Platform charts. If anyone has any questions, please feel free to ask!

    Author's Note:

    Some of you very astute investors may have noticed some slight discrepancies between the StockCharts.com price data and the Tradestation.com price data. If you did, then congratulations because I almost missed it myself, and I was the one creating the charts. Tradestation.com data differs slightly from Stockcharts.com data because my Tradestation platform automatically adjusts stock price data to account for dividends, which is something that Stockcharts.com data (or at least the free data) does not do. That accounts for all the price discrepancies you may have noticed.

    -----------------------------------------------------------------------------

    UPDATED WEEKLY AND DAILY CHARTS ON 9/16/14

    LVS is blowing through support zones so I thought it would be helpful to update the charts for all of you.

    Weekly Chart:

    (click to enlarge)

    Source: Stockcharts.com

    • Note: Data for this chart goes up until September 16, 2014 (intraday). The chart looks at three years of data in weekly intervals.

    (click to enlarge)

    Source: Stockcharts.com

    • Note: Data for this chart goes up until September 16, 2014 (intraday). The chart looks at 18 months of data in daily intervals.

    Final Summary (through 9/16/14):

    LVS has continued upon its downtrend, as I thought it would, and it is now entering the major support zone at $59-$60 (LVS set an intraday low at $59.52). I think it is quite likely that LVS will experience a short-term bounce at these price levels, especially considering the fact that it is currently extremely oversold. However, we will need to wait to see if the bounce is sustainable. For a sustainable bounce we will want to see the RSI, MFI, and Full Stochastics indicators (shown in the two charts above) move up from oversold levels and begin to show some positive momentum. Also, it is likely that we will see LVS re-enter the downtrend channel (sown in red above) and move towards $65 in the short-term. For LVS to continue in a positive direction it will need to be able to overcome prior support levels, which are now resistance levels. This means that LVS now has RESISTANCE at $62 and at $65. If LVS is able to break those resistance levels then we will be able to say that the stock has had some constructive price action, and it will be able to form a more concrete bottom.

    SHORT-TERM TRADERS will want to wait to see if LVS is able to form a "swing low" (a higher high than the previous bar's high), which can happen as soon as tomorrow. I would view a long position in LVS as extremely high risk right now considering the fact that the Fed's announcements will likely be the market's major driver this week, and in all honesty we really have no idea what information the Fed will release in its announcements/statements. Short-term traders looking to capitalize on a short-term bounce in LVS will probably be able to see the stock rise to the $65 region, and obviously how LVS is able to deal with that resistance zone will determine whether or not this is a short-term bounce or a long-term bottom forming here.

    LONG-TERM INVESTORS should probably still focus on LVS' price action over the next few days/weeks, because it will help them figure out whether or not LVS is forming a long-term bottom.

    Personally, I am a long-term investor in LVS, and I am comfortable investing in LVS at its current price. As previously mentioned, I will buying shares of LVS when it reaches major support zones (like the $59-$60 zone), but I am currently planning on waiting until next week before executing any trades (due to the fact that I expect volatility to pick up over the next few days).

    -----------------------------------------------------------------------------

    UPDATED DAILY CHARTS ON 9/18/14

    LVS bounced directly off the support zones I mentioned in my prior charts. How high will this bounce go? Lets take a look at the charts below and try to make a prediction.

    (click to enlarge)

    Source: Personal Tradestation Platform

    • Note: Data for this chart goes up until September 18. 2014 (intraday). The chart looks at 16 months of daily price data.

    (click to enlarge)

    Source: Stockcharts.com

    • Note: Data for this chart goes up until September 18, 2014 (intraday). The chart looks at 16 months of data in daily intervals.

    Final Summary (through 9/18/14):

    It looks like LVS is going to hit major resistance at around $65.25 (using Stockcharts.com data) or $65.75 (using Tradestation data). Please not that these price levels are actually the same, and the only differences comes from the fact that Tradesation has a different way of dealing with dividends than Stockcharts.com does, and today is LVS' ex-dividend date (LVS has a dividend of $0.50/share which accounts for the $0.50 difference in price levels between Tradestation and Stockcharts).

    If LVS is able to break that resistance level it will be bullish for the stock, and probability will increase that LVS is able was able to find a major low in the $59-$60 support region. If LVS breaks resistance at $65.25 (Stockcharts) then its next major resistance level will be $68.25 (Stockcharts), which is approximately where LVS' 50 Day Moving Average will be. After that LVS reaches another resistance level at $70.

    LVS' price action is very important to watch at this point, especially because it is currently fighting to break above its 20 Day Moving Average at $64.26 on Stockcharts.com. If LVS cannot break above its 20 Day Moving Average than probability increases that the stock will fall back to support in the $59-$60 region, and this will only be a minor bounce. I do not expect LVS to reach the resistance zone at $65.25 today, which is actually a good thing because if it reached that zone today it would probably not have enough momentum to break through considering the fact that it would be up approximately 4% (Stockcharts) at that point. Going into today's closing bell, we want to see LVS break its 20 Day Moving Average and close above it, which will turn that prior resistance level into support.

    That's all for now folks! Feel free to comment if you have any questions.

    -----------------------------------------------------------------------------

    Updated Technical Analysis Charts (on 9/26/14):

    (click to enlarge)

    Source: Stockcharts.com

    • Note: Data for this chart goes up until September 26, 2014. The chart looks at three years of data in weekly intervals.

    (click to enlarge)

    Source: Stockcharts.com

    • Note: Data for this chart goes up until September 26, 2014. The chart looks at two years of data in daily intervals.

    Final Summary (through 9/26/14):

    LVS is currently in a downtrend and there is still a lot of work to be done if LVS has any hope of getting out of it. LVS has been unable to rally off major long-term support, which is definitely a concerning sign. If LVS is unable to rally next week then I think that it is highly likely that it will break the low that it set last week, at $59.05, and head down to additional long-term support in the $57.75-$58.50 region. Over the last three months, any rally in LVS has been just a small short-term bounce, and LVS has been unable to hold many major support levels.

    What would it take for LVS to form a technical base and find a bottom? Well, I think that a good technical indicator to watch closely is the 20-day moving average, which can be seen in the chart below:

    (click to enlarge)

    Source: Stockcharts.com

    • Note: Data for this chart goes up until September 26, 2014. The chart looks at one year of data in daily intervals.

    The blue line in the chart above is a 20-day moving average of LVS' stock price. Simply put, the blue line shows LVS' average closing price for the last 20 trading days.

    As you can see, the 20-Day MA offered support for LVS when the stock was in a major bull market (from October to March in the chart above), but then turned into significant resistance once LVS entered a bear market (roughly from April to present day). This leads me to believe that LVS needs to be able to conquer its 20-Day MA, by breaking above it and then holding above it, before a major bottom can be formed in LVS' stock price. As you can see from the chart above, although LVS rallied significantly on Friday (9/26/14) it was not able to close above its 20-Day MA, which is a bearish signal going forward. It will be VERY important to watch LVS' price over the next few days to see if it is able to break above its 20-Day MA, because if the stock is unable to break that resistance level then it will probably reverse and head lower quite quickly.

    Based on the evidence that I've been looking at recently, including momentum indicators like RSI, MFI, and Full Stochastics, it seems likely that LVS will be unable to break above the 20-Day MA and it will soon head to the previously mentioned $57.75-$58.50 support zone. I believe that this is the case because clearly "the path of least resistance" at this point is lower, and many investors seem willing to sell (not buy) at these price levels.

    News reports have definitely taken a nasty turn lately concerning casino stocks, especially those with operations in Macau, and LVS has been hit harder than other casino operators because a huge portion of LVS' net revenue (67.15% in 1H 2014) comes from Macau. The two other U.S. companies that have operations in Macau, MGM and WYNN, are much more balanced than LVS is, and a significantly lower portion of their net revenue comes from Macau. Due to this fact, MGM and WYNN have significantly outperformed LVS over the last three months, which is roughly the time span during which many investment banks and financial news reporters began releasing reports about the decline in GGR growth in Macau. This can be seen in the comparable price performance chart below:

    (click to enlarge)

    Source: Yahoo Finance

    It is also important to note that MPEL, the only one of the three stocks in the chart above (in addition to LVS) that derives a larger portion of its total net revenue from Macau than LVS does (98.95% of MPEL's total net revenue in 1H 2014 came from Macau), was the worst performer of the group over the last three months. This adds credibility to the point that currently the main thing that is driving these stocks lower is negative news concerning either Macau or China (in general). Along those lines, negative economic data reports from China have also been driving these stocks lower, and going forward we can expect that any negative news related to China or Macau will hurt all four of these stocks (with MPEL being hurt the worst, LVS the second worst, and MGM and WYNN being hurt roughly the same amount). The opposite will of course be true if we start to see some positive news come out of Macau, and it is reasonable to expect that if some positive news were to surface that MPEL would lead the group higher, followed closely by LVS, with MGM and WYNN brining up the rear.

    Given the scope of the news that can have a negative effect on these four stocks, and given the fact that all four are currently in a downtrend, I do not believe that now is a good time for short-term oriented traders to be buying any of the four stocks listed above. When speaking specifically about LVS, I believe that the stock will soon break support at $59 and head down to the $57.75-$58.50 support region that I mentioned previously. I believe that it could only take one or two major down days for LVS to reach this support region, and a likely catalyst for this move lower be a new report about Macau that has negative implications for casino operators in the region.

    If LVS is able to hold support in the $57.75-$58.50 support region, by not having its share price close below it, then I would say that there is a relatively high probability that LVS could have a short-term bounce. As previously mentioned, a key indicator to use to see if it is just a "bounce" will be watching how LVS reacts at its 20-Day MA. If LVS is unable to find support in the $57.75-$58.50 region, I would say that it is highly likely that LVS will continue decline until it reaches its next long-term support region, at around $55.

    Given the fact that the $57.75-$58.50 support region is so close to LVS' current share price, and support at $59, I believe that any investors who sell shares on any price weakness will probably see a price do a "whipsaw" that will leave them wondering why they thought it was a good idea to sell. Let me explain what I'm trying to say in a little bit more detail: If a negative news report comes out that causes LVS to drop towards its prior low at $59.05, I believe that it would be a mistake for people to see if LVS breaks below $59, because it would reach support in the $57.75-$58.50 region very quickly. If price holds support in the $57.75-$58.50 region, then it will probably rally soon afterwards, which would mean that now is probably not a good time to sell LVS if it begins to decline.

    Ultimately, I believe that now is a good time to HOLD LVS, because it will likely remain fairly volatile for quite a while, seeing as the stock is currently jumping back and forth between significant support and resistance zones levels right now. Short-term oriented investors could see a nice sort-term buying opportunity if LVS reaches the $57.75-$58.50 support region, because if LVS is able to hold that support region I would expect a significant bounce shortly after given how "oversold" LVS currently is on the weekly chart.

    I hope that all of this makes sense, but if you have any questions then please feel free to ask me.

    Please not that I am not a registered CFA, so none of the information contained in this Instablog post should be interpreted as a direct "recommendation," because I am simply trying to state my current point of view in regards to LVS' price action.

    Tags: LVS, Services
    Aug 29 7:06 PM | Link | 16 Comments
  • Economic Reports Will Move Financial Markets

    Many extremely important economic reports will be released over the next two days, and they should definitely move the major indexes; the S&P 500 ($SPY), the Nasdaq Composite ($QQQ), and the Dow Jones Industrial Average ($DIA).

    A list of the biggest economic reports released over the next two days can be seen as follows:

    (A list of all these reports, a summary of the reports, and the forecasted results of the reports can be found on the Forex Factory website. I found all of this data on that website)

    Thursday:

    7:00am - The Bank Of England (NYSE:BOE) gives its monthly announcement of its "Official Bank Rate"

    Unknown time (probably between 7:00am and 7:45am) - The Monetary Policy Committee (NYSE:MPC) for the Bank Of England (BOE) gives its "Interest Rate Statement"

    7:45am - The European Central Bank (ECB) releases its "Minimum Bid Rate"

    8:30am - Canada releases data indicating the change in the number of "Building Permits m/m"

    8:30am - The US Department of Labor releases the weekly number of "Unemployment Claims" in the US

    10:00am - The Richard Ivey School of Business in Canada releases their data for the Purchasing Managers' Index (PMI). This report is called "Ivey PMI"

    Friday:

    8:30am - Canada releases data indicating "the change in the number of employed people during the previous month." This report is called the "Employment Change" report.

    8:30am - Canada releases data that gives the country's "Unemployment Rate"

    8:30am - The Bureau of Labor Statistics in the US releases the "Non-farm Unemployment Change" report, which is described by Forex Factory as the "Change in the number of employed people during the previous month, excluding the farming industry." This figure is released monthly, and it will give a very good indication of whether or not the recovery in US labor markets is continuing.

    8:30am - The Bureau of Labor Statistics in the US releases the "Unemployment Rate" for the US.

    The most important economic event of the week, a monthly press conference held by the European Central Bank (ECB), will take place early tomorrow morning. The one hour long press conference, scheduled to begin at 8:30am EST, will end approximately when the stock market opens (at 9:30am EST) and it is definitely expected to have a significant impact on financial markets. The ECB has been struggling for quite a while now to combat extremely low inflation levels, and many investors believe that the ECB will announce drastic stimulus measures to spur economic growth and fight low inflation numbers. Such "drastic measures" could include a further reduction of interest rates, and "Because its deposit rate is already at zero, this would include the unusual move of installing a negative rate on overnight bank deposits-effectively charging banks to park funds at the ECB" (WSJ). A few other central banks have already experimented with negative deposit rates, but "the ECB would be the largest to do so" and it would truly be a revolutionary event if the ECB enacts this new policy stance (WSJ).

    The situation was made even more drastic when economic data, released yesterday, revealed that "the annual rate of inflation in the 18 countries that share the euro fell back to its lowest level in more than four years during May, a development that could negatively affect the currency area's weak economic recovery" (WSJ). That data report, which was released only two days before the ECB was scheduled to hold a press conference, made it even more likely that the ECB will adopt an even more accommodative policy stance.

    This week is setting up to be extremely interesting, and I will cover all of these events in my weekly Newsletter (found at: http://liamgarrityrokous.tumblr.com/). For those of you who are more active market enthusiasts feel free to follow me on Twitter (@_LiamGR) because I will be tweeting early tomorrow after information about the press conference is released.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: SPY, QQQ, DIA
    Jun 04 5:59 PM | Link | Comment!
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