Posted by Nicholas Santiago Monday, April 17, 2017, 09:02AM ET
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Posted by Nicholas Santiago Monday, April 17, 2017, 09:02AM ET
Read 116 times
Posted by Gareth Soloway Thursday, April 13, 2017, 03:26PM ET
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Shares of Sprint Corp (NYSE:S) are ready to break lower, out of a bearish triangle pattern on the daily stock chart. For the last few weeks, Sprint has been hammering on the bottom of the triangle and should break next week. The downside will be swift with cell carrier heading to $7.40, the daily 200 moving average. This is where it will find significant support and a likely buying opportunity.
Posted by Nick Santiago Thursday, April 13, 2017, 11:49AM ET
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Many traders and investors are always talking about a story or press releases from a particular company. In fact, if you watch CNBC, Bloomberg or Fox Business News you will always hear why such and such a stock is going to move higher. There always seems to be a catalyst or story behind the coming move higher for the particular equity that is being touted. Rarely, will the talking head in the financial media talk about chart reading or technical analysis.
Lets take a look at a stock which has very good chart support coming up for a potential trade. The name of the company is Jacobs Engineering Group Inc (NYSE:JEC). This stock has been selling off since late January when it traded as high as $63.42 a share. Today, Jacobs Engineering Group Inc stock is trading at $53.48 a share. This is obviously a significant pullback in the share price of JEC stock. So where is the buy level for JEC stock since it has declined so much? Well, this is when we want to look at the weekly chart to see if the there is technical reason for a bounce higher or for the selling to stop. The first thing that traders should note on the weekly chart is that the 200-weekly moving average sits at $50.62 a share. This level also happens to coincide with the November 2016 breakout. Now this is what a technical chart reader would call institutional sponsorship. This trade level is where I would be a buyer of JEC stock. Now, patiently wait for the equity to trade down to the $50.62 area on the chart.
Institutional traders and investors will generally support stocks and markets at these prior breakout levels. This same technique can often be applied on multiple time-frames for day trading, swing trading and investing. Obviously, you will and should test this method first, but with some practice you will find this tactic to be extremely useful when trading all equities.
Posted by Nicholas Santiago Thursday, April 13, 2017, 09:00AM ET
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Posted by Gareth Soloway Wednesday, April 12, 2017, 02:09PM ET
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I am short Home Depot Inc (NYSE:HD) based on multiple indicators showing an extreme overbought condition. The fact that Home Depot Inc (NYSE:HD) has chopped sideways over the last few months, shows institutional selling as funds and small investors buy. This is a passing off of the hot potato before the fall.
Ultimately, when the trend line below breaks (seen in the chart below), Home Depot $HD will collapse quickly. The downside target I have near-term is $135.00. In addition, investors should be very concerned with the recent jobs data and lack of mortgage loans being taken out. This may show signs of a weakening economy. If that is the case, Home Depot $HD will see the brunt of the slowdown in sales and revenues.
Posted by Nick Santiago Wednesday, April 12, 2017, 11:19AM ET
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Two of the leading telecom stocks in the U.S. are Verizon Communications (NYSE:VZ) and AT&T Inc (NYSE:T). Recently, these two companies have been on the prowl for acquisitions. Verizon has bought AOL and Yahoo Inc (NASDAQ:YHOO) over the past year trying to boost its online presence. AT&T Inc has bought Direct TV and Straight Path Communication. Many analysts are expecting these two telecom giants to try and make other acquisitions in the near term future. This expectation should continue to keep the pressure on these two leading telecom stocks.
Traders and investors should take note that Verizon Communication stock will have very good chart support around the $46.25 level. This area that has been defended by the institutional money in January and November of 2016. This area seems to be the line in the sand for the stock and should be the next major level to buy the stock again.
The next major support level for AT&T stock will be around the $38.40 level. This is an area where the stock broke out in November 2016 and should serve as an important trade level again when tested.
Posted by Nicholas Santiago Wednesday, April 12, 2017, 09:06AM ET
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Posted by Gareth Soloway Tuesday, April 11, 2017, 03:58PM ET
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Posted by Gareth Soloway Tuesday, April 11, 2017, 02:48PM ET
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There is something important going on with Gilead Sciences, Inc. (NASDAQ:GILD). It is likely telling investors the downtrend is nearing an end and significant upside is on the horizon. Based on what I will explain to all investors, I will be buying Gilead Sciences at $65.75...
The basis for my thesis comes from the way the stock has acted over the last two months. Since early February 2017, Gilead Sciences jumped from multi-year lows, surging 10% in one week. Over the last 7 weeks, the stock has every-so-slowly inched back down. This is a major change in character from a stock that usually collapsed sharply in a week and took 7 weeks to inch back up before its next collapse. In other words, the price action is showing institutional (big money) accumulation. In addition, the valuation is very attractive. Analysts continue to strongly believe Gilead Sciences needs to buy some drug companies and I believe the company has heard them. I am sure acquisitions will be on the horizon as Gilead Sciences is sitting on a huge pile of cash.
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Posted by Nick Santiago Tuesday, April 11, 2017, 11:39AM ET
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One of the reasons that traders lose money is because they cannot follow the most important rules. In fact, some novice traders do not even have any rules in place when trading. Instead, they are simply relying on luck, tips or random info they come across on the web to choose which stocks they want to buy. Clearly, that is a means to an end, one that will cause you to lose all of your money.
Here are three rules that every stock trader should adopt if they want to have a chance in this market...
1. The 10 Percent Rule.
The ten percent rule was made famous by the legendary trader Jesse Livermore. He said that he would never take more than a 10 percent loss on any stock. Whenever he broke this rule and let his emotions get the best of him he really suffered a bigger than expected loss both financially and mentally. A ten percent loss keeps you in the game and allows you to fight another day. I cannot begin to tell you how many times I have seen one trade turn into a huge loss. This giant loss often hurts the trader involved and has even been the cause of many blown up accounts.
2. Do Not Trade With Capital You Cannot Afford To Lose.
There is an old saying, scared money never makes any money. Whenever traders and investors trade with capital they cannot afford to lose it hinders their thinking. Trading comes with enough pressure already, but betting the rent or the mortgage on a stock simply affects the traders ability to read or follow that stock's price movement correctly. A good rule is to also apply the 10 percent rule to position size. Never put more than 10 percent of your account into any one stock position. This will allow you to find other trading opportunities should they arrive. All of your capital will not be tied up in one stock. By keeping the position size to just 10 percent of your account you will not have too much of an emotional connection to any one trade. Keeping the stress of trading down is extremely important for your health.
3. Learn To Use And Read Charts.
While most of the people in the world will use fundamental analysis to trade (PE ratios, EPS, book value, etc) it is the charts and technical analysis that will show you the actual money flow of a stock. The bottom line, the trend is your friend except at the end. Reading charts of stocks will show you patterns and signal where the money is going and flowing. Remember, it is money flow that moves stock prices not opinion from some talking head on the financial news channel. How many times have you seen a company report great earnings only to see the stock plummet and vice versa? Often, the chart will tell us this will happen before it does. Chart reading will also help traders to place stop losses and know where pattern breaks down or fails. Traders must understand that it is just as important to know where you are wrong on a trade as it is to know when you are correct. Charts do all of these things and more when a trader can read them. Every trader and investor should get educated in reading and understanding charts.
Follow these rules and you will increase your chances of winning and decrease your risk of falling into the traps which so many inexperienced traders succumb to.
If you want to see why Nick and Gareth are the only 2 traders on the web you should follow... take a look at their documented performance for the last TEN years here.