Didn’t get stopped out of DNN. I guess that will happen tomorrow. It will either gap down or bounce off hard that 1 $ level. Very tough call. My hard stop will take care of all that.
A few thoughts on oil as some people asked me about going long. If you go long keep in mind this is a reversal trade. You are trading against the trend. Reversal trades are very difficult because your timing needs to be near perfect and you need to be quick when it comes to exiting the trade. Why is that? Simple. You have tons of overhead resistance. So if a snap back rally is not powerful enough traders will be extremely trigger happy and be willing to exit at every single resistance level.
That said I want to present the kind of trade representing the opposite approach. Identify a sector which is trading near its all time high or at least its 1 or 2 year high. Find the winners within that sector. That’s when traders say: ‘The sky is the limit’, as there is no overhead resistance.
If you apply those rules you come up with gold being the sector you want to concentrate on. The winners within that sector are RGLD and FNV.TO. I believe gold and the gold miners will pull back first before moving up again. RGLD and FNV.TO have built flags and both have support beneath. Those are the 2 stocks I am monitoring very closely.
Have a great evening.