Robert Edwards'  Instablog

Robert Edwards
Send Message
Contrarian daytrading technician who specializes in micro scalping of stocks (using 1 minute bar charts), swing trading of stocks overnight, weekly stock option premium selling, pre-market and post-market psuedo market maker and stealth trading activity, and selling commodity option strangles... More
  • Timely Trading Advice For The Week Of March 24-28, 2014 10 comments
    Mar 23, 2014 8:14 PM

    GDX/NUGT/JNUG Are Stabilizing Along With Gold

    The above chart comes from Americanbulls.com where the gold mining ETF (NYSEARCA:GDX) formed a bullish meeting line pattern which was not negated by the action on Friday. Had GDX closed above the opening price on Friday, Americanbulls.com would have been long again in both GDX and NUGT and taken profits in their DUST short position. An up close above the opening price on Monday would turn Americanbulls.com bullish again both GDX and NUGT. Since April gold has stabilized above $1330, I am hopeful we can challenge overhead resistance at $1352 early this week, and pull GDX back up towards $26 and NUGT to $27+. Reading through Seeking Alpha, I landed on an article that explains very well the reasons gold and miners sold off last week, but notes that buying in the gold metal ETF (NYSEARCA:GLD) increased for the week, and in 8 of the last 10 weeks, click here. We should continue trading no worse than sideways for the next couple weeks in both gold and the miners, and then we might roll on over to lower prices. I am not opposed to buying the triple leveraged bearish gold mining ETFs (DUST & JDST) on dips. I will be looking to pick up some DUST shares below $20 and will add to the position at $19.50 and every 50 cents lower.

    Pharma & BioPharma Is A Hot Sector For Traders

    When I asked readers to provide trading ideas, the most popular space was the pharma/biopharma/biotech area. First I want to thank gaklaw for suggesting two recent IPOs of CNCE & EGRX. I will watch these stocks but there is not enough data yet to perform meaningful technical analysis on the stocks. I next want to thank the stock suggestions of cindywu4 who suggested BITA, AMGN, GILD and HALO. Since the last three are drug/biomedical stocks, I thought it would be appropriate to look at the three charts as follows:

    (click to enlarge)

    The weekly chart of AMGN is quite impressive as it just keeps moving higher and higher. I like to buy on pullbacks which we might get shortly since the last 3 weekly bars all appear to be bearish gravestone markers. If one could get in at $120 or $115 it would be great. Next is the weekly chart of GILD:

    (click to enlarge)

    I find this chart extremely interesting since we are in a solid uptrend with the 50 day moving average still gaining ground on the 200 day moving average, but we have just had a 3-week correction. If you look at the chart history, one is lucky to get more than 4 down weeks in a row without seeing a nice rally. Thus one might be able to begin buying in weakness this coming week towards the $70 area. A significant rally, hopefully to new highs, should be just around the corner. Next is HALO:

    (click to enlarge)

    This stock has already experienced a 9-week correction off of highs and has gone sideways for a couple weeks. This stock looks like a buy in the $12.50 to $13 area in anticipation of a move to $16 or higher in the near future.

    Next I want to thank Growfast for suggesting PCYC & JAZZ. The charts are below:

    (click to enlarge)

    This biotech company is losing a slight bit of its upward momentum but still appears poised to continue moving higher. It also has corrected recently for 4 weeks and in the past it was a great buy on the 5th or 6th week of a correction and bounced back nicely. This coming week it might be a stock to keep on the radar screen, especially if one can pick it up near the 50 week moving average of $112. Now lets look at the weekly chart of JAZZ:

    (click to enlarge)

    Unlike the last chart, the 50 week moving average of JAZZ is still gaining on the 200 day moving average line. Again we have a 4 week correction to buy at a discount. Based on chart history, this stock does not like to correct longer than 5 or 6 weeks usually before posting another rally. What is also interesting about JAZZ, is the following SA article that I located here. Peter F. Way appears to be able to track the actions of market-makers to locate stocks with near term upward movement potential.

    Deep-water Oil Drillers May Be Close To A Temporary Bottom

    I next want to thank Jaybone20 for his suggestion of Atwood Oceanics (NYSE:ATW). He explained how this company is best in class, with state-of-the-art rigs, great earnings and financials. Like the other stocks in this sector like Ensco (NYSE:ESV), and Diamond Offshore (NYSE:DO), ATW has been pulled down to extremely attractive levels by some recent negative news from Transocean (NYSE:RIG). With a PE just under 9.0 and forward PE of 6.5, this stock has some advantages over deep water driller Petrobras (NYSE:PBR) that I have recently been recommending. Here is the weekly chart of ATW:

    (click to enlarge)

    This week ATW completed a bullish engulfing pattern. It would appear that all dips in this stock are a buy. It is even more impressive when one views the daily chart as follows:

    (click to enlarge)

    Looking at this chart explains why PBR was so strong this past week. It is now hitting resistance on a very short-term basis so one may want to try and wait for a dip to buy. However, the stock is definitely in bottoming mode and one might also want to look at the charts of other deep water drillers as well. I will be writing another article shortly on the deep water drillers and will also cover some energy ETFs.

    I want to thank everyone else who submitted stock picks, as I will be commenting on some of them in future articles. I tried to pick out some stocks here that appeared to be timely, based on current market conditions.

    Disclaimer:

    The thoughts and opinions in this article, along with all stock talk posts made by Robert Edwards, are my own. I am merely giving my interpretation of market moves as I see them. I am sharing what I am doing in my own trading. Sometimes I am correct, while other times I am wrong. They are not trading recommendations, but just another opinion that one may consider as one does their own due diligence.

    Disclosure: I am long NUGT.

    Additional disclosure: I am also long PBR

Back To Robert Edwards' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (10)
Track new comments
  • rxraider
    , contributor
    Comments (35) | Send Message
     
    RE, thanks again for your technical analysis. I always like to see your analysis and opinion on gold and the miners. I'm a pharmacist, and pharma/biotech trading is what I do. I bought HALO in Sept. at $8, and recently sold at $16. Bought GILD in Oct. at $59, sold half at $81, and may sell the rest of the position soon... FYI - when evaluating pharma/biotech stocks - technicals are not much of a factor. Pay more attention to FDA catalysts and other events.
    23 Mar 2014, 09:12 PM Reply Like
  • Growfast
    , contributor
    Comments (294) | Send Message
     
    Thanks, Rob. Enjoyed the write up and view of the stocks mentioned.

     

    rxraider - I was in HALO along for that with you. Recently I got back long on HALO. I was reading some about GILD this weekend, mainly that it has a projected forward growth rate over the next several years of 30+%.

     

    On the development stage BioTechs, certainly the FDA catalysts are key. As they enter growth stages of development, those events remain factors but earnings, international expansion, partnerships, cost management, patent protection and other fundamental issues come into play. This is very true with PCYC and JAZZ in their present stages.

     

    I try to use the fundamental analysis along with technical analysis to try to best architect entry and exit. One without the other and I think opportunity is being missed.
    24 Mar 2014, 08:06 AM Reply Like
  • pgfkap1969
    , contributor
    Comment (1) | Send Message
     
    Robert, it seems in the last few months that you have gotten away from your fundamental analysis which was for the leveraged gold ETFS. I have enjoyed reading your past thoughts regarding the trends of NUGT, GDX, and DUST but your recent calls/insight have strayed far from such analysis and your performance lately is terrible. Individual stock ideas are not your bread and butter and certainly not why I follow your comments so closely. Don't worry which way gold is going, please just analyze the leveraged ETFs and get back to basics. You are not obligated to have a recommendation each and every day, IMHO. A previous fan but lately delirious and overwhelmed.
    24 Mar 2014, 01:32 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (587) | Send Message
     
    Author’s reply » I am trading many things to diversify and not have all my eggs into one basket, which means I will trade individual stock names. I have not done well with my last call to buy NUGT as we have fallen much further than expected, but otherwise my calls have not been that bad I don't think. Maybe you can enlighten me some on what call you did not like.

     

    Now that GDX/NUGT/JNUG have fallen this much, I am back to looking at fundamentals as providing some support to pull us out of this hole and make my account whole. So you may get more fundamental information in the future more to your liking.
    24 Mar 2014, 02:36 PM Reply Like
  • sundate36
    , contributor
    Comments (291) | Send Message
     
    Robert -- I very much enjoy your instablog. Your call on the bottom in $PBR was spot on! And everyone know that the direction of gold is very hard to predict. I hope you will keep posting technical updates on the stocks/funds you are trading!
    24 Mar 2014, 03:25 PM Reply Like
  • Growfast
    , contributor
    Comments (294) | Send Message
     
    I second that, Sundate. When Gold gets in its really unpredictable states, especially at the turns, it is very hard to predict and it is nice to have diversification into other things whether other commodities, ETF's or stocks. Technical analysis is always helpful on shorter-term trading and on selecting entry and exit points on longer-term trades and investments. Robert's thoughts are always a refreshing welcome to my information sources and my investing has improved since I've been following and collaborating with Robert.

     

    So, Rob, hard to make everyone happy. But, I like the combination of investments. I don't think your focus is too broad. You should see my portfolio!
    24 Mar 2014, 03:29 PM Reply Like
  • MagicQuote2014
    , contributor
    Comments (76) | Send Message
     
    Hi folks.
    MQ here.
    I got caught on the long side with a small position in JNUG today. (I was negligent of not placing a stop loss order and thought I would be attentive on Monday but got distracted-caveat emptor!) In the first 2 hours of trade today it dropped from 27.90 to 23. I hate to see a 20% loss even on only 100 shares. As a technician I can't comment on the fundamentals, but On a stochastic basis I take solace expecting there to be a short term pop up as the shorts take profit and buy back in on the leveraged Gold EFTs. I will not be liquidating my JNUG today.
    Best of Luck Traders.
    MQ
    24 Mar 2014, 03:41 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (587) | Send Message
     
    Author’s reply » Just did another article, you can check it out here: http://seekingalpha.co...
    24 Mar 2014, 03:50 PM Reply Like
  • cindywu4
    , contributor
    Comment (1) | Send Message
     
    Thank you Mr RE for your analysis! I'd like to add - if it is of any help - HALO and GILD call options don't move much, but AMGN call options do and have done very nice for me. Would you recommend selling puts in HALO / GILD? Also would you still sell CLF puts this week?
    25 Mar 2014, 12:40 AM Reply Like
  • Robert Edwards
    , contributor
    Comments (587) | Send Message
     
    Author’s reply » Halo and Gild would be excellent choices for put selling, now that they have both fallen to lower levels which increases the put premiums one receives. Especially with Halo, it is in an area that provided support in the past and tho it may not immediately rally back up, the downside should be limited.

     

    Regarding CLF, selling 20 strike puts might well be a good trade for this week as there is a good chance we close above 20 by Friday. I expect we should be moving back above 20 shortly.
    25 Mar 2014, 05:14 AM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.