Shares of U.S. Steel (X) opened sharply lower today, hitting a double bottom and multi-year low. However, in dramatic fashion, U.S. Steel started to climb, quickly turning positive. This price action shows major accumulation and buying pressure. The technical double bottom and oversold nature of the equity add fuel to this fire. It is very possible, U.S. Steel put in a major pivot low, possibly a low for the year. I am looking to buy this on any pullback under $10.75. Upside near term is $12.50, then as high as $16.00.
The S&P 500 E-Mini Just Triggered A Head & Shoulder Top
The S&P 500 E-mini futures just triggered a head and shoulders top pattern on the hourly chart. This pattern signals a decline into the 2930.00 area due to the calculation. Full disclosure, I own SDS shares.
Shares of ROKU have collapsed in the last few weeks, falling from an all-time high of over $175 to a low today of $98.65. Today is the first day a major bottom may have been put in. The reason is an epic gap fill, a technical point on the chart was touched. In addition, ROKU flushed early in the day, but as the S&P has continued to fall, ROKU has actually rallied. This points to accumulation buying by big players. This means ROKU will likely bounce near-term to the $119.00 level.
Darden Restaurants $DRI Has Been Crushed Since Earnings, Here’s The Trade
Leading restaurant stock, Darden Restaurants Inc (NYSERI), has been selling off sharply since reporting earnings on September 19th, 2019. The stock was trading as high as $127.60 a share before its earnings announcement. Since that time, the stock has collapsed down to the $116.00 level. Today, DRI stock is testing its 200-day moving average, so there could be some short-term support here around this area. While the stock is currently at short-term support the better support level for a more defined bottom would be around the $110.00 level. This is where the stock broke out in March 2019. Often, prior break-out levels will serve as excellent support when initially tested. I’m keeping this stock on my radar around this $110.00 level for a long side trade.
Shares of Canopy Growth (CGC) hit double bottom support today. In general, swing traders are buying this play for a bounce off the $22.50 level. Upside is back to $25 near-term, then $32.00. As marijuana stocks are trading new 52 week lows and even multi-lows, investors should expect news or rumors of potential buyouts in the industry. Food and beverage companies will start looking to get into the CBD business. Overall, Tilray (TLRY) and Aurora Cannabis (ACB) show potential key technical support down in this area as well. I expect the whole sector to get as much as a 20% bounce near-term.
The Natural Gas ETF (UNG) has fallen from above $23 to $20 in just two weeks. The $23 pivot top represented a daily chart hit of the 200 moving average (resistance). This $20 level represents a hit of the daily 50 moving average (support). Just pennies below this level resides a major gap fill at $19.75. That is where I am waiting to buy. It is also at the Fibonacci 61.8%. With multiple factors, the UNG should get a solid bounce.
First Solar Inc Bounces Off Daily Chart Support, But This Trade Level Is Better $FSLR
Leading solar company, First Solar Inc (NASDAQ:FSLR), bounced off of the $56.00 level today. This level was a very important daily chart gap fill from April 9, 2019. It is possible that this current support level could hold up for a few days. Recently, the stock topped out at $68.55 a share on September 23, 2019, so traders can see the sharp decline that the stock has had since that pivot high. Should the current $56.00 support level fail to hold it should cause the stock to see another sharp drop. The next major support level for FSLR stock will be around the $50.00 area. This is where the stock broke out in February 2019. The 200-week moving average is also sitting just above that level as well making this support area very strong and a solid long side trade setup.
Ollie’s Bargain Outlet $OLLI Is Still Not On Sale, Here’s The Buy Level
In late August, the shares of Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) tumbled after reporting earnings that failed to impress Wall Street. The stock topped out in May 2019 at $103.03 a share. Since that high pivot, the share have plunged by nearly 45.0%. Currently, OLLI stock is trading around the $57.50 level. While many traders and investors are thinking that a bottom has been made the stock it still trades below its 50 and 100-week moving averages. This tells me that the stock is still in a weak technical position on the charts. The important 200-week moving average has not been tested yet as it sits around the $52.73 level, but the longer the stock trades sideways above that area the more that moving average becomes minor support on the charts. My key buy level for OLLI stock will be around the $45.00 area. This important level is where the stock broke out in December 2017. As many of you know by now, I like stocks that retest their old break-out levels. These levels are usually defended by the institutional crowd.
The market is hanging by a thread after the ISM index showed a major contraction in the economy today. Microsoft (MSFT) is worth over $1 trillion and can arguably dictate the price action in the whole market. Therefore, if Microsoft breaks an epic trend line around $137.00, it will likely tumble to $130, then $120, taking the whole market down as much as 10% near-term. Watch this level on a daily closing basis. Note the chart below.
Marijuana stocks like Tilray (TLRY), Aurora Cannabis (ACB) and Canopy Growth (CGC) got a strong buy technical alert today after they flushed early and recovered to turn green. This turnaround is occurring while the S&P 500 is down 2% on the day. This speaks to major accumulation. The technical daily charts of all these stocks have bullish bottoming tails. This can be seen on the Marijuana ETF (MJ) in the chart below.
Here’s The Gann Trade Level For Delta Air Lines $DAL
Delta Air Lines Inc (NYSEAL) was crushed yesterday after it raised its FY19 unit cost outlook to +2% from +1%. The shares plunged lower by nearly 5.0% on the news and are currently trading around $52.97 a share. Traders should note that DAL stock is now below its important 200-day moving average. This is viewed as a negative technical position on the charts and often signals lower prices will follow. The stock peaked on July 24, 2019 at $63.43 a share. So according to my Gann calculations this tells me that major support for the stock will be around the $47.50 area. At that time, I will look to initiate a long side position in the stock. Delta Air lines reports earnings on October 10, 2019 before the open.
There is a trade war in progress right now. That is old news to anyone paying attention in the world. Most investors would shy away from buying China stocks. In fact, most China stocks are not far from 52 week lows, some even near multi-year lows. However, I believe China stocks are screaming buys right now. I believe we will look back in a year and curse ourselves for not buying every China stock out there. Let me explain…
As US economic data becomes weaker, President Donald Trump will likely realize he needs something to help the economy, especially with the election coming up next year. This will push him to do a deal with China. In addition, as with the ISM and PMI economic data signaling, the US economy is weakening fast. Trump will rush to get a China deal sooner, therefore giving China a better deal. Overall, China stocks that have been hurt by the trade war and the economic impact on China will see a massive windfall rebound. Companies like $SINA, $SOHU and even $BIDU could see 50% upside in a year if this happens, maybe even more.
RI), has been selling off sharply since reporting earnings on September 19th, 2019. The stock was trading as high as $127.60 a share before its earnings announcement. Since that time, the stock has collapsed down to the $116.00 level. Today, DRI stock is testing its 200-day moving average, so there could be some short-term support here around this area. While the stock is currently at short-term support the better support level for a more defined bottom would be around the $110.00 level. This is where the stock broke out in March 2019. Often, prior break-out levels will serve as excellent support when initially tested. I’m keeping this stock on my radar around this $110.00 level for a long side trade.
