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DVAX Dynavax Technologies possible large Cup and Handle

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DVAX20090803

Biotech stocks can be very tricky trades and very unpredictable, but I still thought DVAX was worth a mention as it appears to have a large favorable pattern also known as a cup and handle pattern.  The entire pattern is about 9 months in duration.  That is appealing just based on how long it has been forming. To me, a 9 month cup and handle is a lot more valuable than a 2 month cup and handle chart.

Anyway, it appears that the handle is almost done forming and we could see a big breakout type move out of this pattern, possible in August time frame.  One could also make the case that the handle portion of the DVAX chart is actually a smaller cup and handle pattern itself.  That is an interesting type of symmetry and something I do not see all too often.  It is a nice clear signal that helps to make for a clean move.

I really would not want to see anything below 1.74 on DVAX to keep this entire pattern intact.  If it does move below 1.74, then there could still be a case for an eventual breakout, but just for the sake of being ‘picky’ I think that is the standard that needs to be set here on DVAX.

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Trend should now be up for UNG Natural Gas ETF

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ung20090803 After a violent retesting action in the UNG ETF I believe that UNG has now bottomed and should embark on an eventual retest of the 17.55 level.

The recent break to new lows was a head fake in my opinion and we should now see a renewed bullish uptrend gain some footing.  The daily action showed that the most recent retest had to hold to keep any chance of a more significant reversal intact.

The monthly price bar chart of the UNG ETF as shown in the chart to the left tells us that the July monthly price bar showed some signs of demand in that we had a mid range close and test of the previous monthly swing 3 months previous to it.  That initial demand in the July monthly swing is spilling over to August now and I think it will continue.  Certainly there will still be volatility, but the trend will be up as I see it.

There also appears to be an island bottom formation on the UNG ETF that was confirmed as a result of today’s action and gap up.  Island bottom formations are very rare in the commodity futures market.  I don’t believe we had an island bottom on the natural gas futures contract, but I am still going to give merit to the fact that we have an island bottom on the UNG ETF.  It gives me a good dose of evidence that this is the final bottom for UNG.

Even a modest upward retracement of the UNG ETF bear market that it had could see it eventually doing a 50% move from these levels.

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CNXT Conexant Systems Powers Higher after Alert

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I talked about CNXT last Friday in the early afternoon and said “I would say that as long as it can hold 1.47 and keep its composure, I believe it could be setting up for another attack of that blue resistance line and a breakout type move”.

Today CNXT did not waste any time and shot up almost 29% from Friday’s close.  The pattern on CNXT was quite powerful.  It has a large saucer type formation after the huge sign of strength that occurred in mid-April.  Clearly CNXT had a lot of sideways cause (potential energy) building for about 3 months.

The clue was the big volume attempt at a breakout 3 days ago and then the retracement back down to support.  I said on Friday that it needed to hold 1.47 support other wise the scenario would be in doubt.  It did hold 1.47, so no complaints there.

Clearly the market continues to be in an active state right now with plenty of break out type opportunities.  Interesting that they are occurring this time of year now.  Perhaps the current advance in the broad market will continue into September before any more significant correction occurs?  That needs to be studied more closely.

But for now there continue to be breakout type opportunities and CNXT is just another example of one.

Honestly I would have to rate this CNXT breakout near the top of my list as far as quality, advance notice and overall setup type.  It was a clean setup and the probabilities here were very favorable.  Setups like this do not occur too frequently.

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Gold Futures Gold ETFs and Gold Stocks Blockbuster Trade Alert

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alert

BestOnlineTrades is issuing this blockbuster trade alert on the gold sector.  Whether it be Gold Futures, Gold ETFS (such as the GLD or DGP ETF), micro cap through large cap gold stocks, or even long dated call options, we believe the gold trade will be the most popular and productive trade for the next 9 to 12 months.

This is a very important alert and we feel that this alert may go down in history as being the most valuable and important alert we have ever issued. 

BestOnlineTrades has studied the gold market carefully since 2003.  We have seen and recognized the beginnings of this bull market at that time and feel that right now, perhaps even as soon as this week the gold trade will activate and turn into one of the biggest breakouts the world has ever seen.  It may not seem like a breakout at first, and it may disguise itself by transforming into a ‘slow motion’ breakout, but we believe it will still be seen in hindsight as being transformational.

While we do not talk too much about fundamentals here at BestOnlineTrades, we remain open to the possibility that inflationary trends will start to become more entrenched and severe during the next 9 to 12 months.  Part of the reason for this observation has to do with the fact that the US Dollar Index precisely aligned and topped with the April 21st, 2009 Marty Armstrong Cycle date precisely.  The Marty Armstrong Cycle is a very powerful 8.6 year global business cycle model that has proven itself to pick extremely important turning points in major markets worldwide.  The fact that the US Dollar has aligned itself to the model is an event in our opinion that is not to be taken lightly.

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ETFC Etrade Financial in a Bullish Stance

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ETFC20090801

I continue to like ETFC Etrade Financial here.  I like the way it pushed into the gap on 20 million extra shares (illustrated by the two yellow arrows).  To me that is a bullish sign.  It has also managed to break through the bottom blue line which represents the bottom portion of this trading range which should act as support going forward.

The fact that price was able to break back into this trading range is very bullish indeed.  After it broke through and down the blue support line near the 1.35 level, the price of ETFC was supposed to continue falling and continue making bear market lows under 1 dollar.  But the bears could not accomplish that and price recovered back inside the trading range.  Now it has been flat lining sideways.

If ETFC can hold these levels with a worst case of a quick retest of the blue support line at 1.35, it could lead to a large run near the 1.95 level which would be an ideal exit point.

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US Steel X Almost done creating Inverse Head and Shoulders Pattern

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It really is quite amazing. I feel like a kid in a candy store.  There are so many long side setups now that it is hard not to find one out there.  It is a result of the strong bullish persistence in the broad market as it rebounds out of the depths of its bear … Read more

What do Animals Have to do with Trading ?

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cheetah7

I started a new category here called ‘Trading Psychology’ so that I can occasionally talk about aspects of trading that are more intangible. I can tell you with zero doubt that one of the most difficult aspects of trading that has challenged me time and time again is the tendency towards over trading when there really are not any good trades to be had.

That’s where patience comes in, and that is why I posted a picture of a cheetah in this post waiting in the tall grasses of (Africa?) to scope out its target and see if if can find something interesting to chase.  I don’t know how long cheetahs wait in the fields before they scope out a target and attack.  But I doubt they just run into the field paws flapping everywhere and then just chase and jump on the next moving zebra over the hill. 

They take their time, they scope out a target, they are extremely patient.  Heck most animals and pets I know of are very patient.  Certainly not all of them are, but I would say most of them are.  So it is not just cheetahs.

So most traders can probably learn a lot from the cheetah and most other animals and pets.  Try to avoid rushing to find a trade during the trading day, and then in panicky fashion buying something because it ‘looks good’.

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A Quick Review of How BestOnlineTrades is Doing

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I have written about a number of different stocks here at BestOnlineTrades and this posts serves as a quick informal review of what we have talked about and what we have learned based on our observations.

I don’t claim to be a ‘guru’ or a ‘super legendary’ stock picker.  But I can tell you that since the year 1994 I have looked at tens of thousands of stock price charts, if not more. I have spent so much time looking at all these charts that I really feel as though many patterns and setups are permanently in my DNA.  If you watch something closely enough or spend enough time with it, it seems only natural that you will begin to become very familiar with it over time and know what to watch for depending on what you are trying to achieve. I have seen patterns, I have watched price and volume, I have seen really large patterns and very short term ones.

So the habit of looking at so many price charts has definitely helped to develop a good sense of what is a buy, and why it is a buy.  On the other hand, looking at too many price charts too much of the time can lead to trader burnout and that is not so good either.  So definitely a balance is necessary.

Ok before I ramble on too long, lets take a quick look at what I talked about over the last few weeks and what the result was if anything:

  • PIR – first mentioned slightly under 2.30, hit a high of 2.84 or 23%
  • JVA – first mentioned at 3.20, hit a high of 3.85 or 20%, I believe this one is going to move pretty soon to the upside.
  • FITB – mentioned at 7.70, hit a high of 9.51 or 23%
  • CEMJQ – mentioned at .275, hit a high of .415 or 51%
  • IDOI – first mentioned at .0023, hit a high of .0063 today or 174%
  • BEHL – first mentioned at .0255, hit a high of .10 today or 292%
  • ETFC – first mentioned at 1.54, today is at 1.50 for a loss of (2.6)%, but I am still very bullish on ETFC and believe the upside move is coming shortly
  • CNXT – mentioned today at 1.50, no change yet, still building something
  • PACR – mentioned today at 2.22, closed at 2.48, or up 11.7 %
  • EPEX –mentioned at .43 but said no signal given yet which it still hasn’t given.
  • UNG – mentioned at 13.80, today at 12.85, loss of (6.8%), here I still believe that UNG is trying to form a longer term bottom. If the most recent lows hold then look out above. We could see a huge rally. 
  • PLM – mentioned a few days ago at 1.44, today at 1.67, up 16%
  • SRSR – mentioned at .081 – currently in play and expecting an upside reactionary bounce.

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Powershares QQQ Trust does not want to Retrace

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Today the powershares QQQ Trust, symbol (QQQQ) tested the gap from yesterday on about 25% less volume.  It has become clear to me at this point that any decline we get from here is going to be labored and lacking in conviction.

I still think 37.20 is fair game for a target on the QQQ Trust in August, but there are a few reasons why this may be delayed short term.  One of the reasons is the US Dollar index, which broke down badly today.  I am going to write a post on the US Dollar in a moment.  A declining US dollar is supporting higher prices in the broad market.

I should also mention that major topside resistance on the QQQ Trust comes in near the 42 and change level.  That level represents the primary bear market trend that began way back in October of 2007.  It is in my opinion a very significant level and one that we will be watching closely going forward. At the current rate the QQQ is travelling, we might just get there within a month or two.

It seems almost a foregone conclusion that this level will be tested.  The nature of the test on the weekly charts is going to be very important to watch.  If we see price bump its head on that down trend and have a fast reaction down, it could be a warning sign that the down trending resistance line will hold and not be broken.

On the other hand if we see price hug the bottom of that resistance line for say a month or two, then it could be a bullish sign and we might see a massive upside breakout through that bear market force.

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