In This Market You Can Buy Anything Until Things Turn: Here Are My Long Picks!
This market will not go down. At least investors should not expect it to until it proves otherwise. What would prove otherwise? A solid to large down day to start, then a second solid to follow-through down day. Back to back down days have been elusive. If you recall, over two weeks ago we had a massive drop in the markets. It was Wednesday, May 17th. However, there was no follow-through the next day. Instead, markets floated up, up and away, reaching new all-time highs. The secondary down day is extremely important to confirming a change in direction.
As long as you do not get this reversal signal, buy every beaten down stock that is left to buy. Investors are searching for these names and will pile in on the first sign of a pop. My favorite picks are below.
All three of these stocks reported great earnings and initially jumped, but then slowly pulled back to their lows. The next leg up should be on the horizon.
Watch These Key Support Levels For This Giant Bank Stock
Wells Fargo Co (NYSE:WFC) has been steadily declining since March 1st, 2017 when the stock price traded as high as $59.99 a share. Today, WFC stock is trading at $51.99 a share which is about $8.00 lower from the March peak. As you know, the leading financial stocks in the U.S. have been under pressure recently as bond yields have declined.
Where are the key support levels for WFC stock? There are two major chart support levels for the WFC stock price. The first key support area is around the $49.00 level. This level is where WFC broke out in November 2016. The second key support level for WFC stock is around the $45.00 area. This level is major support as it was where the stock broke out of a bearish base. Very often, bearish pattern failures will be major support levels when retested.
Why This Market May Be Ready To Turn: Importance Of Major Even Numbers
The stock market has gone higher, consistently for years. Corrections have been non-existent, especially recently. Most investors think major even numbers have little to do with a top or a bottom on a stock, but I believe differently. Investors must realize that the stock market goes up and down on emotion. Essentially, stocks trade based on human psychology. This is actually a very key component to why even numbers are so key in tops and bottoms. The human condition associates even numbers with either overbought or oversold. A stock at a high even number will come across to investors as expensive while a stock falling sharply into a low even number will come across as cheap.
For example, Amazon (AMZN) and Alphabet (GOOGL) just crossed above the $1,000 per shares level. On a psychological level, $1,000 is a daunting number and investors tend to look at it and think "I will not buy now", or "It is now time to sell". If you look at the major stocks that are driving the stock market in recent months, many others are crossing or near crossing major even numbers. Not only has Amazon and Alphabet blasted through major evening numbers but Apple (AAPL) recently crossed the $150 level and since then it has stalled and is actually starting to fall. Facebook (FB) has also crossed the major psychological $150 level and stalled in recent weeks. Another major player in the stock market rally has been NVIDIA Corp (NVDA). The stock is currently trading over $148.00 and nearing the major $150.00. It is my prediction that once NVIDIA crosses the $150 level, all the key drivers of this massive tech stock market rally will have a psychological sell and it should create a stock market top. This will likely happen in the coming days.
This Leading Biotechnology Level Should Be On The Radar
One of the leading biotechnology stocks in the world is Celgene Corporation (NASDAQ:CELG). This company discovers, develops, and commercializes therapies to treat cancer and inflammatory diseases. Celgene stock topped out on March 17th at $127.64 a share. Today, Celgene stock is trading at $116.97 a share. Traders can easily see that this leading biotechnology stock has been trending lower on the charts lately. The stock now has major chart support around the $110.00 level. This is an area where the major institutional money supported the equity back in December 2016. Often, old pivot levels will serve as major chart support when retested.
Watch This Trade Level For Foot Locker Inc (NYSE:FL)
One of the leading retail companies of athletic shoes and apparel is Foot Locker Inc (NYSE:FL). The stock has been selling off since late April 2017. At that time, the stock traded as high as $77.86 a share. Today, the sports apparel retailer is trading at $55.35 a share. FL stock also tumbled by about 15.0 percent after reporting earnings on May 19th, 2017. The stock has been steadily declining since that earnings release.
Traders and investors should now watch the $50.00 to $51.00 area for the next major support level. This is a solid double bottom chart level from June 2016. Often, prior support levels from the past will also be support by the institutional money when retested. This is a chart level where traders should look for a bounce in the stock.
This Stock Chart Is An Obvious Buy For Smart Investors
Retail has been showing signs of life lately. One of my favorite bullish chart setups is Ralph Lauren Corp (NYSE:RL). The stock took a nose dive from $84 to $66 in May. Over the last two weeks the stock popped up and has stayed near the highs and moved sideways. This pattern formation is known as a bull flag and is extremely bullish for another surge in the coming days. I am loving this chart setup and looking to buy some on the long side. The upside target for Ralph Lauren Corp is $77.50. This would be an over 10% profit once achieved.
Know This Trade Level For This Leading Transportation Stock
C.H. Robinson Worldwide, Inc.(NASDAQ:CHRW) is a leading provider of transportation services and logistics solutions throughout most of the world. It should be noted that CHRW stock topped out in March at $81.16 a share. Since that pivot top the stock has declined to its current share price of $67.14. Traders can easily see that this stock is in a weak technical position. CHRW stock price is trading below its 50 and 200-day moving averages. The next major chart support level for CHRW stock is around the $63.23 level. This is an area where the stock was defended by the institutional money back in February 2016. This important chart level is an area where the stock will likely find major support and stage a bounce in the share price.
Shares of Walt Disney Co (NYSEIS) are within pennies of the daily 200 moving average. Moving averages are usually major support or resistance. As price is falling down into the 200 moving average, investors should view the 200 moving average as support. In just a six weeks, Walt Disney has fallen from over $116 to this $104 key support. That is a big fall for this mega sized company. I personally view it as an indictment on the economy. Basically, it may be saying the economy is weakening and Walt Disney Co is the leading indicator. Investors can look for a quick technical bounce off the daily 200 moving average. But after that bounce of 5% or so, investors should exit. Ultimately, I see Walt Disney going even lower.
Last week, one of my favorite patterns developed on the daily and weekly stock chart of Seagate Technology PLC(NASDAQ:STX). This is a chart formation that has helped me make money on countless occasions with a very small failure rate. Well, the pattern just worked again for profit of over 40.0 percent in just one week.You see, the chart pattern is simply a footprint of human nature. It gives us a good picture of the money flow into and out of a particular stock. In this case, the money was coming out of STX stock and the chart pattern told us that. The chart pattern also told me that the stock would likely breakdown around this time. This is why it is so important for traders and investors to get educated in reading and understanding charts.
I'm expecting the second half of 2017 to be much more volatile and choppy than the first half of this year was. Honestly, anyone could have made money after the election by just buying an index fund. Those days are coming to an end as we approach the second half of 2017. It will be critical to know and understand the technical picture of the price charts. Get ready, the recent two day drop in the NASDAQ is just a preview of what is to come later this year. There are lots of trading opportunities on the horizon if you can simply understand the stock chart patterns and formations that reveal themselves every trading day.
Here Is The Price Point Where I Would Be Willing To Buy Amazon
Shares of Amazon (NASDAQ:AMZN) are in full correction mode. After hitting a 1,016.50 late last week, the stock collapsed. Today, the low is $945.00. I cannot tell you how many investors are itching to buy the 5% drop. I am here to say it will go lower. While bounces will occur, they are low reward and high risk. The very first level I am interested in buying is the $847.00 price point. This is a high reward, low risk technical chart level as seen below. At this price point, Amazon would be down 15% from the all-time highs. A 7-10% bounce would be likely off this level and a high reward swing trade.
Starbucks Corporation (NASDAQ:SBUX) Gets Roasted, Watch This Trade Level
Starbucks Corporation (NASDAQ:SBUX) is a leading marketer and retailer of coffee products around the world. Recently, the stock peaked out on June 5th, 2017 at $45.87 a share. Since that pivot top in the stock the shares have declined to $60.81 a share. Today, the stock is sitting right on the 50-day moving average which could be viewed as short term support. Traders should also watch the $59.50 level for even stronger chart support. This is a major retrace level and also the support levels from April 28, 2017 and May 18, 2017. Often the past support levels will serve as major support when retested.
This morning, crude oil is declining lower by nearly 4.0 percent. This is causing most energy stocks to sell off. Even energy stocks that are focused on natural gas are coming under severe pressure. Cheniere Energy, Inc.(NYSEMKT:LNG) is a company that is a leader in the liquified natural gas sector. This stock just made a recent high on the chart at $51.41 a share on May 25, 2017. Today, LNG stock is trading lower by $1.58 to $46.72 a share. Traders and investors should note that this stock will have major institutional chart support around the $41.50 area. This is a spot on the chart where the stock broke out to the upside in January 2017. This level should be defended again when it is retested.
Trade Alert: Head & Shoulder Breakdown At Hand On Alcoa Corp ($AA)
Shares of Alcoa Corp (NYSE:AA) have an ugly head and shoulder pattern formation on the stock chart. While the head and shoulder pattern has not triggered yet, it is on the verge. If it triggers, there is huge downside to $23.00. The current price is $31.50. That means there is potential downside on Alcoa Corp of 27%. The key for investors is to watch for the neck-line to break. That is at approximately $31.00. Keep in mind, it needs to be a daily close below $31 to trigger. Once that happens, game on! Head and shoulder patterns are nasty and Alcoa Corp has a beautiful one.
One of the leading organic and natural food products companies in the world is Hain Celestial Group, Inc. (NASDAQ:HAIN). This stock has been trading in a very narrow and sideways range since August 2016. This is when the stock plunged by nearly $20.00 a share. You see, on August 12th, 2016 HAIN stock was trading as high as $56.99 a share, today the stock trades at $35.13 a share.
So where is the trade? The stock should have a major institutional support level around the $30.75 area. This is a level where the stock was supported back in early 2013. It is important to note that prior institutional support levels will often be major buying opportunities when retested. Keep HAIN stock on the radar around this level.
Major Support Tagged: Kroger (KR) Strong Buy While Average Investors Panic!
Shares of Kroger Co (NYSE:KR) took a beating for the second day in a row. After warning on earnings yesterday, Amazon (AMZN) bought Whole Foods (WFM) today. All grocery plays fell off a cliff on fear that margins would be pressured. The panic was palpable and that is exactly what investors want to see to find great buys! Kroger Co hit major support at $21.50 and became a strong buy.
If logic takes control, investors will realize that even though Amazon is buying Whole Foods, they will not kill margins overnight. They need to integrate, change... etc. It will take years. They may not even be able to do much in the long-run to disrupt the grocery industry. In addition, it will likely force Kroger and other grocery players to adapt and become stronger. Valuation wise, this is a home run for a move back to $25.00 in the near-term. Logic confirms it as does the chart. See below...
Today, leading wholesale warehouse retailer Costco Wholesale Corp (NASDAQ:COST) is declining by $4.06 to $163.03 a share. The retail giant's stock price has been coming under pressure since early May when the shares traded as high as $183.18. Currently, COST stock is sitting right on its 200-day moving average so there is some near term daily chart support.
Unfortunately, the better and stronger institutional support level for COST stock price will be around the $157.00 area. This is a spot on the chart that has a gap window from December 8th, 2016. Often, this level will be defended when retested. This level presents a very solid risk/reward long (buy) side opportunity in the stock.
Major Top Alert: Tesla Inc (TSLA) Weaker Than Market Here Is The Trade...
Shares of Tesla Inc (NASDAQ:TSLA) have topped. I expect the stock to have a large corrective move to $325, possible as low as $285. Last Wednesday, euphoria hit an all-time high as the stock jumped sharply to new all time highs. The chart on Tesla Inc put in a doji topping signal and has since been under performing the stock market. Volume was huge on that doji day, signaling major distribution by institutions and smart money. In the days that have followed, volume has remained high. As the big money exits, the small investors who bought into the hype are left holding the bag. Investors buying north of $370 are insane. If they stepped back and did not let the emotion get the best of them, they would notice the stock has moved higher from $180 to $385. That is a monster 113% move since last November. That is not normal unless Elon Must cured cancer...and he did not. I love Elon Musk as much as the next guy but I am also a realist, and all signs point to a major top and correction in shares of Tesla Inc.
Know This Institutional Trade Level For This Leading Food Product Company
Last week, most of the leading food processing stocks sold off after Amazon.com (NASDAQ:AMZN) announced that they were acquiring Whole Foods Market Inc (NASDAQ:WFM) for $13.7 billion. Many of these leading food processing stocks are still coming under pressure since that news was released. At some point some of these leading food processing stocks will look attractive.
General Mills, Inc. (NYSE:GIS) is a leading is a manufacturer and marketer of branded consumer foods. This stock peaked out in July 2016 at $72.95 a share. Since that high pivot the stock has plunged lower and is currently trading at $56.85 a share. Many traders are now wondering if the stock is on sale, but the chart pattern indicates that the shares are headed lower. At this time, the stock has major support around the $52.50 area. This is a level where GIS stock based for roughly two years before breaking out. Very often, prior base patterns will serve as major support when retested. It should also be noted that General Mills, Inc. (NYSE:GIS) will report earnings on June 28th, 2017 before the opening bell.
Nasty Reversal On McDonald's Corp (MCD) Seals Bearish Fate. Note This Chart...
McDonald's Corporation (NYSE:MCD) just put in a major top. Not only is trading above a 27 P/E, historically insane, but McDonald's Corp opened higher today and sold hard on volume. The jump this morning came after Cowen upgraded the fast food company and placed a $180 price target. Let's think about this for a second. In October 2016, McDonald's Corp traded at $110.00. Today it hit a high of $155.28. That is a whopping percentage gain of 41% in 8 months.
Think about that, after a 41% gain, now an analyst upgrades it? That is some sort of wacky joke. This is how tops are created. The reversal signals institutions are selling into the upgrade volume. I have a downside target on McDonald's Corporation at $134.25. This would be about a 50% retrace of the 8 month up move. Hold on and enjoy the ride. I am loving the short trade.
IS) are within pennies of the daily 200 moving average. Moving averages are usually major support or resistance. As price is falling down into the 200 moving average, investors should view the 200 moving average as support. In just a six weeks, Walt Disney has fallen from over $116 to this $104 key support. That is a big fall for this mega sized company. I personally view it as an indictment on the economy. Basically, it may be saying the economy is weakening and Walt Disney Co is the leading indicator. Investors can look for a quick technical bounce off the daily 200 moving average. But after that bounce of 5% or so, investors should exit. Ultimately, I see Walt Disney going even lower.
