Energy prices are on the move once again. Crude oil is at five-month highs and solidly above $100 a barrel. And natural gas hit multiyear highs with severe cold weather across North America and no end yet in sight to this record-breaking winter. Add in the macroeconomic picture of increased… Read More

The energy market has been resilient as crude oil has stabilized above $100 a barrel with another recovery from recent lows. The three-year range from roughly $80 to $110 targets a move to $140 per barrel on a technical breakout above the highs. Brazilian stocks, on the other hand, have been moving down since their 2011 peak, as emerging markets gave back some of the record gains that began in 2009. iShares MSCI Brazil Capped (NYSE: EWZ) is trading about 45% below its 2011 highs. However, a bullish divergence, with new lows in price without new highs in volatility, is… Read More

The energy market has been resilient as crude oil has stabilized above $100 a barrel with another recovery from recent lows. The three-year range from roughly $80 to $110 targets a move to $140 per barrel on a technical breakout above the highs. Brazilian stocks, on the other hand, have been moving down since their 2011 peak, as emerging markets gave back some of the record gains that began in 2009. iShares MSCI Brazil Capped (NYSE: EWZ) is trading about 45% below its 2011 highs. However, a bullish divergence, with new lows in price without new highs in volatility, is signaling stabilization. Brazilian oil company Petrobras (NYSE: PBR) plummeted from a peak near $77 in 2008 to a low below $15. The stock saw a recovery in 2009 to around $50 before beginning its long, long downtrend. For the past nine months, PBR has traded sideways between $18 and $12. A modest upside objective is a move to the $15 midpoint, and the combination of strength in oil prices and bargain basement prices in Brazil makes PBR a good reward-to-risk play. #-ad_banner-#The $15 target is about 34% higher than recent prices, but traders who use a… Read More

Banks as a group have had a great couple of years with super-low interest rates and the essentially zero cost of money. The Financial Select Sector SPDR (NYSE: XLF) has risen almost 200% in the past five years, and monetary policy doesn’t appear to be changing anytime soon. The yearlong trading range between $18 and $22 targets a $4 move on a breakout and a 20% extension of the rally run. One stock that is lagging behind the sector and likely to play catch-up is Morgan Stanley (NYSE: MS). MS has support just below the technical pivot at… Read More

Banks as a group have had a great couple of years with super-low interest rates and the essentially zero cost of money. The Financial Select Sector SPDR (NYSE: XLF) has risen almost 200% in the past five years, and monetary policy doesn’t appear to be changing anytime soon. The yearlong trading range between $18 and $22 targets a $4 move on a breakout and a 20% extension of the rally run. One stock that is lagging behind the sector and likely to play catch-up is Morgan Stanley (NYSE: MS). MS has support just below the technical pivot at $28. An upside breakout of the four-month trading range between $28 and $32 targets a move to $36. Only a close below $24 on a weekly basis would negate the bullish trend. #-ad_banner-#The $36 target is about 18% higher than recent prices, but traders who use a capital-preserving, stock substitution strategy could make almost 70% on a move to that level. One major advantage of using a long call option rather than buying a stock outright is putting up much less capital to control 100 shares — that’s the power of leverage. But with all of the potential… Read More

The S&P 500 Index has bounced back from its healthy 6% sell-off and is again within spitting distance of its all-time high. And while the automotive industry’s recovery cannot be underestimated, shares of former blue-chip and Big Three automaker General Motors (NYSE: GM) are struggling, down 11% year to date. #-ad_banner-#I think the stock’s current pullback represents an excellent opportunity to participate in the continued recovery of the American auto industry. After being booted from the Dow 30 back in 2009 after filing for bankruptcy protection, GM relaunched as a publicly traded company in November 2010. Coming off… Read More

The S&P 500 Index has bounced back from its healthy 6% sell-off and is again within spitting distance of its all-time high. And while the automotive industry’s recovery cannot be underestimated, shares of former blue-chip and Big Three automaker General Motors (NYSE: GM) are struggling, down 11% year to date. #-ad_banner-#I think the stock’s current pullback represents an excellent opportunity to participate in the continued recovery of the American auto industry. After being booted from the Dow 30 back in 2009 after filing for bankruptcy protection, GM relaunched as a publicly traded company in November 2010. Coming off a July 2012 low, shares rocketed to a peak just below $42 in late December 2013. They now sit 13% below their highs, making them a great bargain. GM has two-year midpoint support at $30. A recovery to the highs near $42 following the recent pullback to $34 projects a measured move to $50. Only a weekly close below $30 would negate the technical pattern. The $50 target is about 37% higher than recent prices, but traders who use a capital-preserving stock substitution strategy could make triple-digit profits on a move to that level. One major advantage of… Read More

Gold had its first negative year in more than a decade as the bullish bias all but disappeared among investors. The yellow metal has had a 35%-plus drop from a record high above $1,900 an ounce in 2011. The June lows were tested in the past few weeks, but a bullish divergence (new lows in price without new highs in volatility) suggests the type of technical bottom that often puts in a long-term price base. SPDR Gold Shares (NYSE: GLD) was off nearly 30% last year, while the Market Vectors Gold Miners ETF (NYSE: GDX) was hit even… Read More

Gold had its first negative year in more than a decade as the bullish bias all but disappeared among investors. The yellow metal has had a 35%-plus drop from a record high above $1,900 an ounce in 2011. The June lows were tested in the past few weeks, but a bullish divergence (new lows in price without new highs in volatility) suggests the type of technical bottom that often puts in a long-term price base. SPDR Gold Shares (NYSE: GLD) was off nearly 30% last year, while the Market Vectors Gold Miners ETF (NYSE: GDX) was hit even harder with a decline of more than 50%. Therefore, miners offer greater reward to risk if and when gold stabilizes and recovers.   GDX is trading near its decade-plus lows around $16, which were made in 2008. A rally to the top of the nine-month trading channel at $30 is my initial target. #-ad_banner-#The $30 target is about 45% higher than recent prices, but traders who use a capital-preserving stock substitution strategy could see a 133% return on a move to that level. One major advantage of using a long call option rather than buying… Read More

In a stellar year for most sectors, many health-related stocks have outperformed. iShares US Medical Devices (NYSE: IHI) is up 32% year to date compared to a 25% gain in the S&P 500. And among that fund’s holdings is Boston Scientific (NYSE: BSX), whose stellar run in 2013 has led to shares doubling. Beginning the year just below $6 a share, BSX has climbed higher in $2 increments in a methodical stair-step pattern. Each push above technical resistance from $6 to $8 to $10 held the previous ceiling as solid price support. The recent $10 to $12 range projects a… Read More

In a stellar year for most sectors, many health-related stocks have outperformed. iShares US Medical Devices (NYSE: IHI) is up 32% year to date compared to a 25% gain in the S&P 500. And among that fund’s holdings is Boston Scientific (NYSE: BSX), whose stellar run in 2013 has led to shares doubling. Beginning the year just below $6 a share, BSX has climbed higher in $2 increments in a methodical stair-step pattern. Each push above technical resistance from $6 to $8 to $10 held the previous ceiling as solid price support. The recent $10 to $12 range projects a move to $14 on an upside breakout through $12 resistance. Only a weekly close below $10 would negate the bullish bias. #-ad_banner-#The $14 target is about 22% higher than recent prices, but traders who use a capital-preserving, stock substitution strategy could see a 100% return on a move to that level. One major advantage of using a long call option rather than buying a stock outright is putting up much less capital to control 100 shares — that’s the power of leverage. But with all of the potential strike and expiration combinations, choosing an option can be a… Read More

The holiday season can bring cheer to retailers that count on it to deliver a large portion of yearly sales. It’s been a good year for the sector so far, with the SPDR S&P Retail ETF (NYSE: XRT) outperforming the broader market with a 40%-plus year-to-date gain. But not all retailers have shared in the prosperity. Abercrombie & Fitch (NYSE: ANF), which was once a leader in the fickle world of fashion, is off 28% in the past 52 weeks. Even more striking is its underperformance in the past five years, which can be seen in the chart below. Read More

The holiday season can bring cheer to retailers that count on it to deliver a large portion of yearly sales. It’s been a good year for the sector so far, with the SPDR S&P Retail ETF (NYSE: XRT) outperforming the broader market with a 40%-plus year-to-date gain. But not all retailers have shared in the prosperity. Abercrombie & Fitch (NYSE: ANF), which was once a leader in the fickle world of fashion, is off 28% in the past 52 weeks. Even more striking is its underperformance in the past five years, which can be seen in the chart below. ANF has largely traded in a range between $54 and $34 with solid support just below at $30. Bullish divergence, i.e., new lows in price without new highs in volatility, may be a sign that a bottom is forming. The first recovery objective is the $44 midpoint of the two-year trading range. A break above $54 projects a $20 move and a secondary target of $74. #-ad_banner-#The $44 target is about 32% higher than recent prices, but traders who use a capital-preserving, stock substitution strategy could see a 146% return on a move to that level. One… Read More

Energy prices are on the move once again with crude oil solidly above $100 a barrel and at 18-month highs. Shares of offshore drilling company Transocean (NYSE: RIG) have been trading in a $20 range between $60 and $40 since August 2011. RIG has been a market laggard in the past year, down 2% while most stocks have pushed higher. Support at $40 has held with a… Read More

Energy prices are on the move once again with crude oil solidly above $100 a barrel and at 18-month highs. Shares of offshore drilling company Transocean (NYSE: RIG) have been trading in a $20 range between $60 and $40 since August 2011. RIG has been a market laggard in the past year, down 2% while most stocks have pushed higher. Support at $40 has held with a 52-week low of $43.65. The stock actually has stair-step support, first at $46 from the past six months, then at $44 dating back to the second half of 2012, and finally, at $40 from a double bottom made in December 2011 and June 2012. The midpoint of the two-year range sits at $50. A push above that level targets a move to the top of the channel at $60, with a longer-term price objective of $80 on a breakout… Read More

The changes at Groupon (Nasdaq: GRPN) appear to be paying off. The departure of founder and CEO Andrew Mason in February marked an emotional low point. The stock has doubled since then, and it is now up nearly… Read More

Momentum is an important attribute when picking stocks to trade, and the strength of the price movement is something you want to embrace, not fight against. One of the strongest market sectors this year has been pharmaceuticals. The SPDR S&P Pharmaceuticals (NYSE: XPH) has gained more than 30% year to date, double the gains of the S&P 500. Not all pharma stocks have fared so well, though. Pfizer… Read More

Momentum is an important attribute when picking stocks to trade, and the strength of the price movement is something you want to embrace, not fight against. One of the strongest market sectors this year has been pharmaceuticals. The SPDR S&P Pharmaceuticals (NYSE: XPH) has gained more than 30% year to date, double the gains of the S&P 500. Not all pharma stocks have fared so well, though. Pfizer (NYSE: PFE) is only up 11% year to date, lagging behind the broader market and sharply behind its peers.  On the chart below, we can see that the January breakout above $27 held on the June and July pullbacks, forming a key support level. The $4 range between the $27 breakout level and the $31 yearly highs targets a breakout move to $35. The $35 target is about 22% higher than current prices, but traders who use a capital-preserving stock-substitution strategy could more than double their… Read More