This weeks watch-list performed as expected, with recent additions on the list breaking out in sync with the broad markets, while the precious metal sector continued into a deeper correction. I think we are getting closer to a tradable bottom in the precious metals space but we need to be very patient with that sector. There were several fake outs this week where gold popped and dropped and the mining sector followed suit. Traders who bought into those quick bursts will have been stopped out for a small loss or are currently under water on those trades. Let's take a look at what some of the stronger stocks did.
This chart of VII basically embodies the energy sector as a whole last week. A lot of these stocks have gone too far to purchase without a pullback, so for next weeks list I will try to find some charts that haven't quite taken off yet. That being said, I am a little curious to see what next week brings because the price of oil softened heading into the weekend.
BNP also had a huge week. Anyone who bought this on Monday will be nicely into the money. My strategy with a lot of these energy trades is to sell into strength because it is hard to know whether this rally will be sustaining or not.
CPG is on a massive two week run. I would definitely be looking to take profits on this one.
ACES, which is a gaming company, continued up this week but I think it could still run a little further. I would consider a trailing stop loss on this one.
If RCH makes a new high, I think it could run for a while. With a lot of these stocks that broke out this week, I would consider moving the stop losses at least up to a breakeven level, which would essentially make them free trades. If price continues to rise, one can then raise the stops to the next logical level based on our trend trading methodology.
WJX reversed a little lower on Friday, so traders need to decide whether they are going to hang onto it through a dip or take profits in this current area.
CORV launched pretty hard but could still run further in my opinion. Again, traders should have a plan for how they plan to take profits on this.
BDT is a slower mover that could still be bought here.
BLDP is one of those stocks that has been on our watch-list forever. My approach to this has been to hold it through the corrections and wait for it to roll over before selling it. I won't show a chart but AQN has been on a similar run. Both companies would actually be a good stocks to have in the Natural Selection Stock Portfolio.
I've included DOL here because I wanted to show again what I mean by rolling over. This could still easily recover in the coming days but for the purpose of quick trading, I would not be holding this a present.
Okay, now over to the precious metals sector for a few charts.
This is chart of the entire gold mining index on the TSX. It is now oversold on the stochastics and is looking like it wants to turn up. This coming week is highlighted by another interest rate decision by the Federal Reserve, so we should expect some volatility and also perhaps some turning points in several sectors. In the meantime, some of the mining stocks have rolled over pretty hard and I will drop them off the watch-list for now. An example is GUY, below.
This will likely rally hard once the sector turns up again but for now the chart is broken.
In contrast, a stock like OLA has shown great strength through the latest correction.
We can see here that OLA has stayed above its 50 dma and that the moving average remains in an uptrend. I will be focusing more on these stronger charts in next weeks watch-list.
Have a good weekend!