Trading High Potential Stocks

Another trading idea as I am always looking for great set-ups within the Agriculture sector. I still think this could be one of the strongest sectors in the years to come. In any case, my beliefs don’t matter. I stick to the charts. They need to confirm my beliefs.

AVD – American Vanguard is a good example. It is trading near its all time high and is worth putting on a position from a purely technical perspective. The recent shakeout below the moving average 200 should ultimately turn out to be a picture perfect false move. The stock is now powering higher and on its way to take out the second pivot point around 35. I believe AVD has the potential to behave exactly the same way ONXX – Onyx Pharmaceuticals recently did. My annotated charts exemplify what I am talking about. I have a position in AVD.

AVD - American Vanguard

Up-to-date Agriculture Sector Overview Chart on my public list.
Up-to-date Agriculture II. Sector Overview Chart on my public list.

ONXX - Onyx Pharmaceuticals

Do not trust your opinions… But let the action of the market confirm your opinions. – Jesse Livermore

Charts: http://stockcharts.com/public/1109839/tenpp

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Quick chart post with a trade idea I consider to offer good potential. The way I see it, the chart is well suited for true position traders. OAS – Oasis Petroleum has broken out above long-term horizontal resistance and is now consolidating and building out a bullish flag pattern. A conservative price target looks to be 47$. The technicals ultimately imply an even higher price target. The stock shouldn’t dip back below the recent swing low at 34.53. A stop loss below that level offers protection if price action invalidates my technical analysis assumptions. I have a position.

Real movements do not end the day they start. – Jesse Livermore

Charts: http://stockcharts.com/public/1109839/tenpp

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Quick post with a beaten down sector trade idea. I have recently charted FAN – First Trust Global Wind Energy ETF as several German listed individual stocks within that sector sparked my interest. FAN would be a diversified approach without exposing yourself to single stock risk. The ETF also makes sense for US based investors who want exposure to wind energy as most of the biggest players are not listed in the US. Top holdings of the FAN ETF:

• China Longyuan Power Group-H
• Nordex AG
• Vestas Wind Systems
• Iberdrola S.A.
• EDP Renovaveis SA
• Gamesa Corporacion Tecnologica, S.A.
• China WindPower Group Limited
• Greentech Energy Systems
• Infigen Energy
• PNE Wind AG
• Arise Windpower AB
• Japan Wind Development Co., Ltd.
• Theolia SA
• Eolus Vind AB

Here’s my technical analysis take on FAN.

FAN - First Trust Global Wind Energy ETF Technical Analysis Chart

Up-to date Wind Energy Sector Overview Chart on my public list.

The chart looks like a potential bottom formation. If the stock can take out the 8.00 $ level a conservative measured move completing the inverted head and shoulders pattern would imply a price target around 10 US$. A wider stop loss below the weekly moving average 30 makes sense as it would give the stock enough room to breathe. I have a position in FAN.

Recently I have come across a lot of picture series showing the incredible air pollution levels in China. One series that comes to mind would be the Atlantic’s ‘China’s Toxic Sky‘. I have no idea how to solve that kind of problem. One thing is for sure though. This is unsustainable and China has to change something as the situation is slowly starting to get out of control in some big Chinese cities. Renewable energy sources could very well be part of the solution.

Es ist nicht gesagt, daß es besser wird, wenn es anders wird. Wenn es aber besser werden soll, muß es anders werden. - Georg Christoph Lichtenberg

Charts: http://stockcharts.com/public/1109839/tenpp

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A few quick thoughts on the market and some select sectors.
Here we go:

• Overall market as in S&P 500: This is one of the most hated rallies I have witnessed in quite some time. A lot of ‘rational’ arguments you can come up with in order to justify not participating. One would be that it’s late in the bull market cycle. Looking at price alone though the conclusion to come up with is very simple: The market wants to go up. In my main watch list that contains roughly 400 charts almost every one looks constructive and wants to go up. I also see healthy rotation going on. That being said there is always the risk of a correction and a swing top. As of yet I would rule out a long-term market top for the following two reasons: 1. Topping processes need time to play out. 2. Sector rotation is healthy.
• Gold: Gold needs more time. I simply cannot see any kind of immediate buying pressure.
• Gold and silver mining stocks: Abysmal performance and technical behaviour. One indicator I am watching is how strong leaders like FNV – Franco Nevada are acting. FNV has started to break down from the bullish wedge / flag pattern. Lots of miners going down hard today. The way I see it lots of miners have been holding up or have been moving down in a controlled fashion for quite some time based on hope, perceived low valuation, catch up potential etc. If the miners go down more from these levels I think a flush out is likely. This could get very ugly as a lot of weak hands might be forced to finally throw in the towel. I am still avoiding this sector for now.
• Biotech: True bull market. The majority of the biotech stocks I am watching simply wants to go up. That’s especially the case with small to mid-cap biotech stocks. My public list contains 5 Biotech sector overview charts. More than enough to find interesting trading ideas.
• Agriculture: An investment theme I am still very bullish on going forward. MON – Monsanto would be one example of a stock I have been monitoring for quite some time on my public list. The trend is up and accelerating.
• Commodities: Paper and pulp related stocks are looking good. CUS.TO – Canexus is acting well and would be one way to play that trend using a picks and shovels approach. Coal stocks are trying to put in a bottom. It is still very early days to call for a turnaround. Small-cap oil and natural gas related stocks are doing well. Lots of trading ideas you can find on my public list charts.

It’s much easier to learn what you should do in trading than to do it. – William Eckhardt

Charts: http://stockcharts.com/public/1109839/tenpp

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