Gold remains in a confirmed downtrend. Price action has been bearish for several years now and remains bearish. My job as a trader is to objectively analyze price action. I tune out all the noise and I don’t care about opinions. A year ago I did the following technical review of Gold – GLD ETF:

GLD – Gold ETF Descending Triangle Pattern

Let’s recap the current technical situation:

  • Dominant technical pattern is the double top with the reaction high being a lower high
  • Initial thrusting move to the downside in the 1st half of 2013
  • Bearish descending triangle pattern in the 2nd half of 2013 and 2014
  • Long-term weekly moving average 30 with a bearish downward slope
  • Resumption of the downtrend is about to start i.e. resumption of the trend leading into the consolidation pattern

Click on the weekly GLD chart to enlarge:

Gold GLD - Bearish Price Target

The main takeaways are the following:

  1. In downtrends you either short or you stand aside
  2. Calling tops or bottoms for that matter is a losing proposition

Conclusion: Talking of bottoms, the really important thing to keep in mind here is that there are no signs whatsoever of capitulation type volume. For a bottom to take shape we either need a very long basing pattern or market participants to throw in the towel. From a psychological perspective keep in mind the 100 US Dollar level is extremely important.

As you know, round numbers act as strong magnets attracting price. It is highly unlikely gold will touch and bounce exactly at the 100,00 level. Support is best thought of as a price area. Therefore odds are very high price will undercut that widely followed level in order to trigger panic selling. That is when we should see volume surge. As long as there is no washout and the downtrend continues to produce falling tops there is no reason to turn bullish.

Tyler Bollhorn - Trading Quote

The best traders are not afraid of holding on to strong stocks, they are afraid of holding on to losing stocks. – Tyler Bollhorn

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The stock I labeled as my Favourite Aggressive Small Cap Play when it was trading @ 3.30, went on to confirm its W – Bottom pattern and today generated a long-term buy signal on the monthly chart confirming the strong new uptrend. MIFI – Novatel Wireless is now flashing an all green signal on multiple timeframes.

Along the way I kept publishing chart updates for MIFI on Twitter showing why it is a high potential stock.

Here’s the chart if you are not reading this on my website:

MIFI Novatel Wireless Chart Technical Analysis Uptrend Resuming Bullish Stock

Here’s the chart if you are not reading this on my website:

MIFI Novatel Wireless - All Stars Aligned

As mentioned at the beginning of the post, today an important long-term buy signal was generated. All that is needed now is for volume to surpass the black line I drew into the chart. That would be further indication we have a huge winner in the making. We are not there yet. But the technical picture couldn’t possibly look better at this point in time.

Click on the Monthly MIFI Chart Analysis to enlarge:

MIFI Novatel Wireless - Potential Super WInner

Conclusion: My favourite quote from Justin Mamis best describes the current situation:

Justin Mamis - Trading Quote - Crowd

Justin Mamis – When To Sell
Justin Mamis – Trading Wisdom

The crowd is bargain hunting in what was; the knowing are buying what will be. – Justin Mamis

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Tonight’s stock is a great looking chart that is well suited for trend following traders. The solar stocks as a group are starting to gain some serious traction. That is precisely when you want to take a closer look at the sector. My job as a trader is to seek exposure to the strongest stocks I can find.

The first step is to identify a strong sector like solar. The next step is to look for stocks either trading at an all time high or making new 52 week highs. The goal is to eliminate candidates that might run into trouble due to Overhead Resistance.

SUNE – Sunedison has already taken out immediate overhead resistance and offers almost clear sky potential. Overhead resistance dating back several years typically has much less of an impact on a stock’s future price performance. That said, SUNE is displaying huge pattern pressure and is now starting to develop momentum. Overall the technical picture is very constructive and SUNE is offering one of the most bullish chart set-ups within the solar industry.

Click on the SUNE – Sunedison chart to enlarge:

SUNE Sunedison - Great Solar Stock For Trendfollowers

The weekly SUNE chart has been trending higher for almost 2 years, the initial thrusting move. Then it consolidated for almost 1 year. Now SUNE has broken out again, printed a new 52 week high and from a purely technical perspective the price target area is the 40 – 50 $ price range drawn into the chart. As you can see I am using past pivot points as the starting point to draw the horizontal trendlines defining the target range channel.

Conclusion: SUNE – Sunedison offers great potential for traders with a trendfollowing mind-set. Ideally the stock should steadily climb higher mimicking the ascent of its initial thrusting move.

Further reading: Ed Seykota Trend Following Wisdom

My style is basically trend following, with some special pattern recognition and money management algorithms. – Ed Seykota

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The Russell 2000 Small Cap Index ETF IWM is about to run higher. As usual my opinions are not important. I trade the charts. And the chart of IWM – Russell 2000 ETF is extremely bullish right now. Here is why:

  • IWM closed at a new all time high
  • We have an ABC pattern playing out. Thrusting move, consolidation pattern,
    resumption of the trend leading into the consolidation pattern.
  • Bear trap that adds fuel to the fire.
  • Small cap stocks have the least exposure to a strong dollar.
    They often have no earnings and are mostly doing business domestically.

As you know, I was and still am very bullish on the US Dollar. I outlined the bullish thesis very early on and explained exactly why the US Dollar would move higher. It was all in the charts. Those who got it wrong basically got caught by the ‘Dollar’s impending demise’ narrative. As a technical trader I do the exact opposite. I am flexible, open-minded and when the technical situation changes, I change my mind and align myself with the new trend.

Here is my original: Bullish US Dollar Outlook Analysis.

On to the IWM charts. The weekly chart is a beautiful example of a high odds set-up. There is huge pattern pressure and we are witnessing very bullish moving average expansion. This always happens at the beginning of a new bullish thrusting move.

Click on the IWM weekly chart to enlarge:

You can see the purely technical price target for IWM is 145. As I outlined in my chart annotations a much more aggressive way to trade this bullish set-up would be to buy triple leveraged ETFs like TNA or UWM. It goes without saying that leveraged ETFs are not the perfect buy and hold instrument. But during strong trending periods they can be a very effective way to get maximum exposure.

Click on the daily IWM chart to enlarge:

The daily chart is displaying the first sign volume is about to increase. Overall the technical picture looks very constructive.

Remember: Bullish price moves accompanied by increasing volume are great. But price can easily march higher on low volume. Ultimately price is all that matters.

I become a buyer as soon as a stock makes a new high on its movement after having had a normal reaction. – Jesse Livermore

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A stock I recently highlighted on Twitter has turned into a huge winner. Here is my original tweet on NOAH – Noah Holdings an asset management service company for wealthy clients:

For those of you who can’t see the chart, here it is. Click on the NOAH chart to enlarge:

The stock did behave exactly as I expected. The very bullish moving average expansion was just starting. Price was very close to its ATH (all time high). That’s precisely when the ATH started to act as a magnet attracting price. Then the stop buy order cluster was triggered. That is because a lot of technical traders and momentum traders simply buy when a stock is able to print a new ATH. The strength of NOAH shouldn’t come as a surprise.

The charts of various ETFs like CAF, PEK, ASHR, FXI were Telegraphing the bullish move in China way in advance. My tweet on ASHR was pretty timely, ASHR  started its huge run the very next day:

If you can’t see the chart you need to read the post on my website or go to my twitter feed.

What we are seeing now with NOAH is the first pullback after the run-up. Here’s the current chart taking into account the most recent development. Click on the NOAH chart to enlarge:

As I outlined in my chart annotations, most of the time this is how I look at bullish charts. If a chart has run up, is strongly trending and is in the process of pulling back I do the following. I draw 2 bullish scenarios into the chart:

  • The slightly less bullish flag pattern in grey and
  • The slightly more bullish ascending triangle scenario drawn in blue.

As soon as the stock can reclaim the upper trend line of the flag pattern drawn in grey it means the very bullish ascending triangle is the pattern in play. That’s when I become extremely bullish as I know odds I am holding a winner are extremely high.

Conclusion: It all comes down to the following: When you outline a bullish scenario road map and the stock acts exactly as you expect it to act, that’s when you should be and stay bullish. Then simply give the stock room to develop into an even bigger winner.

NOAH company description from Yahoo finance:

Noah Holdings Limited, through its subsidiaries, operates as a wealth management service provider with focus on distributing wealth management products in the People’s Republic of China. The company’s products include fixed income products, including asset management plans sponsored by mutual fund management or securities companies, real estate funds managed by it, and collateralized fixed income products sponsored by trust companies that provide investors with fixed rates of return. It also offers private equity funds products comprising investments in various private equity funds sponsored by domestic and internal fund management firms, estate funds and fund of funds managed by the company, and the underlying assets that are portfolios of equity investments in unlisted private companies; and other products, such as mutual fund products, private securities investment funds that are privately raised funds investing in publicly traded stocks, and insurance products. The company serves high net worth individuals; enterprises affiliated with high net worth individuals; and wholesale clients, primarily local commercial banks and branches of national commercial banks that distribute wealth management products to their own clients. Noah Holdings Limited was founded in 2005 and is headquartered in Shanghai, the People’s Republic of China.

This paradox exists because most investors think quality, as opposed to price, is the determinant of whether something’s risky. – Howard Marks

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MITL Mitel Networks Business Communications Stock with Bullish Chart Pattern Pressure

April 8, 2015

The acquisition of MVNR – Mavenir Systems by MITL – Mitel Networks has the potential to create a new leader for converged IP communications for businesses and mobile operators. This is now the most interesting mid-cap play in the VoLTE and VoWIFI area. I originally bought MVNR – Mavenir Systems but shortly after my entry it […]

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TWTR Twitter – Social Media Stock Starting Bullish Upside Move

March 24, 2015

Twitter is gaining some serious traction as their business model is starting to make more sense with each passing day. Heck, even I am on Twitter now Kidding aside, the name of the game is to wait for the charts to confirm one’s bullish assumptions. The long white candle TWTR – Twitter printed today is […]

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NLNK Newlink Genetics All Time High Biotech Stock – Bullish vs. Bearish Scenario

March 17, 2015

Here’s another constructive looking Biotech stock I recently mentioned on social media. NLNK – Newlink Genetics is trading at an all time high. If you are a regular reader you know that this is a very bullish situation. Buyers are in control. With NLNK I see the potential for the stock to gap up above […]

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Bullish Biotech Stocks CLDN Celladon, QURE Uniqure – Charts Trading At All Time High

March 10, 2015

These are two extremely bullish looking Biotech stock charts. Both are trading near their respective all time high. I recently posted them on Twitter and wanted to highlight them: CLDN – Celladon CLDN recently gapped above its all time high. From a purely technical perspective this is the most bullish price behaviour you could possibly […]

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How To Trade Super Stocks: TSLA vs. XON Intrexon Technical Analysis Case Study

March 8, 2015

If you follow me on Twitter you will have noticed my latest tweet on what to expect during uptrends and downtrends: TA 101: In downtrends, surprise moves tend to be to the downside $GDX $GDXJ In uptrends, surprise moves tend to be to the upside $IBB $XBI — Olivier Tischendorf (@Tischendorf) March 8, 2015 This […]

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