I don't really have a lot to say today that I didn't cover in yesterday's email. It should suffice to say that a whole bunch of precious metals stocks had great a week, racking up 10-30% gains across the board. This is good for us because we made some money but it also creates some challenges because many of these companies are now quite extended (overbought) on the daily time-frame. For a lot of these companies, we must now wait for a pull-back to add to our positions or to buy new positions. Next week we will continue to watch these strong charts to look for entry opportunities but we will also want to introduce some new companies to the watch-list that that are just starting to break out.
Apart from the gold and silver miners, our watch-list had an okay week. Both Canadian and US markets were flat to down on the week, so having some of our non-precious metal stocks performing well was a bonus (NEPT for example) . Today the VIX (volatility index) perked up, indicating that we could be starting another corrective phase in the broad markets. We will need to pay attention to this because if the market does start to deteriorate, we will need to focus more strongly on defensive positions like gold and silver miners, base metals, and utilities. The oil and gas sector continues to get steam-rolled and the banking sectors in both Canada and the US are weak. To me, this indicates that the economy is deteriorating overall. We will have to watch how this plays out in the coming weeks.
Here are a few of this weeks notable charts:
OLA continues to power higher. The volume is quite large and their has been no meaningful sign of a pullback. I would raise the stop loss again.
GUY is a stock that I feel could really run and will definitely benefit from higher gold prices.
EDV has been really strong and although it is overbought, I expect the eventual pullback to be mild.
BTO produced a topping candle today, which suggests that a pullback could be coming soon.
Most of our miners are in a position similar to one of the above. Some are just starting to break out and I will cover those in the next watch-list. Let's look at a few of our non-mining stocks.
NEPT had a little breakout last week and followed it up with a massive launch higher this week. Traders likely took some profits today and/or set trailing stop-losses.
KLS is one that looks a little weak. The 50 dma is flattening out and this week the price dropped below it. I probably wouldn't own this at this point, especially considering the other options available.
FLY is another that broke down. Again, I would not own this at present.
CCO broke out on Friday and then followed it up by crashing on Monday. The breakout is invalidated at this point. Uranium continues to be a tough sector to trade.
EFN has had a slow and steady march since its reversal. This looks quite strong at this point.
Let's finish it off with another strong one. KNT is a beautiful chart that has been trending for many months now, although it is finally getting overbought.
Have a great weekend!