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Trading Recommendation – KBH, SIVB, MAIN, CNQ, PCSB and INGR

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The US stock markets continued their upward grind and the index recorded an eighth consecutive weekly close in the green. A new life-time is a sign of strength, which should be purchased. Hence, we have selected a few stocks that have a good risk to reward ratio and can be purchased even at these levels.

Key points

  1. The S&P 500 continues its march higher
  2. Some stocks are likely to participate if the uptrend continues
  3. Buy KBH, SIVB, MAIN, CNQ, PCSB and INGR

However, the S&P 500 is getting into the overbought zone. Therefore, we recommend trading with only about 50% of the usual allocation size.

KBH – Buy 28, Stop Loss (SL) 26, Target 33 and higher

Weekly chart

After peaking in 2005, the stock plunged during the financial crisis. It has struggled to rally since then and has been languishing below the $29 levels for more than a decade. It has formed a large base. Once the stock breaks out of the overhead resistance, it is likely to start a new uptrend. While the stock looks like a good bet even for the medium-term, we shall stick to the short-term targets. Traders who want to hold the stock for the medium-term can do so by trailing their stops higher.

Daily chart

The stock rallied from February to July of this year, post which, it entered into a correction that ended on September 22. The stock, then, quickly rallied from a low of $20.68 to $27.67 in about 20 days. Since then, the stock has been consolidating in a tight range between $26.21 on the lower end and $27.77 on the upper end. Once the stock breaks out of the upper end of the range, we expect it to rally to $33.2 levels in the short-term. Though $29 might act as a resistance, we believe that it is unlikely to hold for long.

Therefore, we recommend a long position on a breakout and close above the range at $28. The initial stop loss can be placed at $26. Our target objective is $33 and higher. Traders can book 50% profits at $33 and trail the remaining position higher.

SIVB – Buy 225, SL 215, Target 252

Weekly chart

The stock is in an uptrend and has been a multibagger since bottoming in 2009. The stock more than doubled from end-June 2016 to end-February 2017. Thereafter, the stock entered a period of consolidation, during which it only experienced a shallow correction. The stock resumed its uptrend in the week before, which should carry it to $274 in the medium-term. However, we want to trade it for the short-term, therefore, let’s look at the entry and exit levels.

Daily chart

The stock gapped up to new lifetime highs on October 27. We like the way it has been consolidating near the highs since then. This shows that the bulls are not in a hurry to book profits even at these levels. If the bulls manage to breakout to new highs, we expect the stock to regain momentum and quickly rally towards its short-term target objective of $252. Therefore, we recommend a buy at $225 with a stop loss of $215.

MAIN – Buy 41.1, SL 39.6, Target 43.86

Weekly chart

The stock bottomed out in end-2008 and rallied sharply till 2013. Thereafter, the stock spent the next three years in consolidation. An attempt to breakdown of the range failed in early-2016, after which the stock resumed its uptrend.

Daily chart

The stock has formed an ascending triangle pattern on the daily chart. $40.5 had been acting as a stiff resistance on the upside. However, on Friday, the stock broke out and closed above the overhead resistance. We now expect the stock to resume its uptrend and rally towards its pattern target of $43.86. We can buy the stock at $41.1, above the intraday highs of Friday and keep a stop loss of $39.6.

CNQ – Buy 36.02, SL 32, Target 41

Weekly chart

The stock topped out at $53.93 in early-June 2008. Thereafter, the stock plunged during the financial crisis. Though the stock pulled back from the lows, it could never breakout to new highs. It continued to make lower highs and then in early-2016, it again plunged to the lows. Since then, the stock has recovered smartly and is on its way to the downtrend line, which is likely to act as a stiff resistance once again.

Daily chart

After a smart recovery from the lows in early-2016, the stock entered a period of consolidation. It remained range bound between $27.52 to $34.3 for about one and a half years. It broke out and closed above the range on Monday of last week. Thereafter, it continued to rally for the next four days. We believe that the stock has started a new uptrend that is likely to carry it to $41 levels. Therefore, we recommend a buy at the current levels of $36.02 with a stop loss of $32.

PCSB – Buy 19.31, SL 18.5, Target 21.2

Daily chart

The stock has a trading history of just a few months, therefore, we are not analysing the weekly charts.

The chart shows that the stock rallies and then consolidates for the next few weeks. Following this pattern, the stock bottomed on September 07 at $16.5 and rallied to $19.2 by September 29. Since then, the stock has been consolidating in a small range of $18.56 to $19.20. It broke out of the range on Thursday of last week and extended its gains on Friday. It should now rally towards its target of $21.2. Hence, we recommend a buy at the current levels with a stop loss of $18.5.

INGR – Buy 130, SL 124, Target 139

Weekly chart

The stock has been in a steady uptrend since bottoming out in 2009. It entered into a correction in September of last year. Since then, it remained within the range of $113 to $129. However, last week, the stock broke out of the overhead resistance and is now likely to resume its uptrend.

Daily chart

The stock had been range bound between $113 and $126 since February of this year. On November 01, it broke out of the range and also above the overhead resistance. Though it did not close strong, the bears could not push it back into the range as the buying continued on the following two days. We believe that the stock has completed its consolidation and is likely to resume its uptrend. It has a short-term pattern target of $139, which is close to the lifetime highs. We, therefore, recommend a buy at the current levels of $130 with a stop loss of $124. There is a small resistance at $135, therefore, we recommend raising the stop loss to breakeven once the stock reaches $135.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 9 rated postsRakesh Upadhyay is a Technical Analyst and Portfolio Consultant for The Summit Group. He has more than a decade of experience as a private trader. His philosophy is to use technical analysis for momentum trading and fundamental analysis for long-term positions. Rakesh likes to keep himself fit by lifting weights and considers himself to be a spiritual person.




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Trade Recommendation: Waves

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One of the most important things that has kept our losses minimal during this bear market is that we never allow the fear of missing out influence our trading decisions. When we see an altcoin that we have no positions in rally, we do not immediately jump on the bandwagon. That’s how a lot of new retail traders lose their capital. Instead, we wait for a significant pullback and signs of consolidation. This is exactly our approach to trading Waves (WAVES/BTC).

Waves was among the first to decouple from Bitcoin’s trend. From the low of 0.0002336 on November 21, 2018, it skyrocketed to as high as 0.001209 on December 19. That’s an increase of over 400% in less than a month. From that point, the market has been correcting. After two months of consolidation, we’re convinced that Waves is due for a rally.

Technical analysis reveal that Waves/Bitcoin is trying to carve a short-term bottom of 0.0007. This view comes after the market refused to breach this level after four attempts in less than two months. While others may argue that the support is now weak due to multiple touches, we believe that this is a case of accumulation rather than demand drying out. Volume supports this assumption.

First, we can see that volume has significantly decreased since December 19, 2018. This tells us that sellers are losing ammunition. Also, volume is thin whenever Waves touches support of 0.0007. This indicates that many participants are not interested in selling at these levels. Thus, it is likely that the market maker attempts to keep the price low and shake out as many participants as possible.

The strategy is to buy as close to 0.0007 support as possible. If bulls continue to preserve the support, they will likely attract the momentum they need to move to our targets of 0.00087 and 0.001047.

The process may take less than a month.

Daily Chart of Waves/Bitcoin on Binance

As of this writing, the Waves/Bitcoin pair is trading at 0.0007152 on Binance.

Summary of Strategy

Buy: As close to 0.0007 as possible.

Targets: 0.00087 and 0.001047.

Stop: 0.000675

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 331 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Trade Recommendation: Stellar

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We removed Stellar (XLM/BTC) from our watch list when it failed to hold 0.000026 on January 28, 2019. At that point, we knew that a move below this level will likely result in panic selling. That’s because 0.000026 stood as the market’s 2018 support. Stellar has managed to stay above this level for the whole of 2018. Thus, the move below it on January 28, 2019 ignited massive selling.

To stop the bleeding, Stellar needed to generate heavy volume on the daily chart. This would indicate that a big buyer has stepped in to absorb the selling pressure. We suspect that this happened yesterday, February 19.

Technical analysis shows that XLM/BTC is attempting to carve a durable support at 0.000021. This view comes after Stellar printed heavy volume yesterday when the market touched 0.000021. On February 19, the volume skyrocketed to 142.652 million XLM units when the daily trading average was about 60.614 million XLM units. The last time Stellar generated this type of volume was five months ago. This was an indication that a large player has stepped in.

In addition, XLM is trading near oversold conditions. With the market being so badly beaten over the last couple of months, it is due for a relief rally at the very least.

The strategy is to buy as close to 0.000021 as possible. If bulls can stay above this level, they will likely generate a rally to our targets of 0.000026 and 0.00003.

The process may take a month.

Daily Chart of Stellar/Bitcoin on Binance

As of this writing, the Stellar/Bitcoin pair is trading at 0.00002288 on Binance.

Summary of Strategy

Buy: As close to 0.000021 as possible.

Targets: 0.000026 and 0.00003.

Stop: 0.00002

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 331 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Trade Recommendation: EOS

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EOS (EOS/USD) is a market that looks primed to explode.

It established a short-term bottom of $1.55 on December 7, 2018. At that point, the market lost over 93% from its 2018 high of $23.029 on April 29. While this crypto looked dreadful when it recorded its 2018 low on December 7, volume on that day was significantly heavy. This told us that the smart money was accumulating positions in bulk while stopping the bleeding at the same time.

With buyers emerging, EOS entered an accumulation period as it range traded between $1.75 and $3 for over two months. This period ended yesterday when the price decided to trend higher.

Technical analysis shows that EOS took out resistance of $3 on February 18, 2019. This triggered the breakout from range accumulation, which may have likely signalled that the bottom is in. Also, the breakout looks valid. Yesterday, the coin printed volume that’s over 300% of its daily average. This tells us that sentiment has likely shifted from bearish to bullish.

Yesterday’s move, however, pushed EOS to overbought territory. Also, the 200-day moving average is acting as a resistance. These signals indicate that this altcoin is due for a pullback. We’ll take this chance to buy on dips.

The strategy is to buy on the retest of $3. If bulls can stay above this support, they’ll likely gather the momentum to rally to our range midpoint of $4. Take that out and the next target is $5.

The process may take less than a month.

Daily Chart of EOS/US Dollar on Bitfinex

As of this writing, the EOS/US Dollar pair is trading at $3.7441 on Bitfinex.

Summary of Strategy

Buy: As close to $3 as possible.

Targets: $4 and $5.

Stop: $2.88

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 331 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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