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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: Loom Network

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The Loom Network/Bitcoin pair (LOOM/BTC) dropped to as low as 0.00001001 on August 14, 2018. At that price, the market lost almost 88% of its value from the 2018 peak of 0.00008199.

Like we’ve seen in many altcoin cases, LOOM/BTC started to bottom out after suffering tremendous losses. This process is always difficult to time, especially if the market has a price history of fewer than six months. However, we can always rely on reversal structures to see if the bottom is already in place. We’re seeing LOOM/BTC mark its bottom as well as end its downtrend using a reliable reversal pattern.

Technical analysis shows that LOOM/BTC has taken out resistance of 0.000019 on October 10, 2018. This triggered the breakout from the double bottom structure on the daily chart. The pattern tells us that the support area of 0.00001 has been created and has completed the retest. The creation of this support attracted bargain hunters and bottom fishers. This generated the momentum needed to breach resistance of 0.000019.

The breakout looks convincing as well. On the day of the breakout, LOOM/BTC generated volume that’s over 428% of its daily average. This suggests that the fear of missing out is creeping in. Participants are buying at a higher price in massive numbers. This is the state of mind that ignites powerful bull runs. 

The strategy is to buy on dips as close to 0.000018 as possible. The market is still close to overbought territory, which tells us that it may go below the breakout. As long as LOOM/BTC stays above 0.000018, it has the momentum to rally to our target of 0.000028.

The process may take more than a month.

Daily Chart of Loom Network/Bitcoin on Binance

As of this writing, the Loom Network/Bitcoin pair is trading at 0.00001962 on Binance.

Summary of Strategy

Buy: On dips as close to 0.000018 as possible.

Target: 0.000028

Stop: 0.0000175

 

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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3.7 stars on average, based on 253 rated postsKiril is a financial professional with 4+ 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 ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. 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: NEO

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On our August 29, 2018 trade recommendation, we anticipated NEO/Bitcoin (NEO/BTC) to breakout from the large falling wedge on the daily chart. We emphasized the importance of buying only after the pair generates volume of 1 million NEO units. Without heavy volume, the breakout would not look convincing to breakout traders and trend followers. Hence, there wouldn’t be enough momentum to ignite a massive rally.

Though NEO/BTC broke out from the falling wedge as expected on August 31, the volume it printed was way below our requirements. As a result, the breakout rally was short-lived since bottom fishers saw the low volume breakout as an opportunity to take profits. The selling drove the market down. Nevertheless, this gives us a chance to buy the bottom before NEO/BTC takes off.

Technical analysis shows that NEO/BTC is respecting the historical support of 0.00245. This view comes after the pair successfully completed the retest when it dropped to as low as 0.00239 on October 15 but bulls came to the rescue and lifted the market above the support. We watched NEO/BTC from that point to see if the support will hold. The confirmation came on October 18 when volume suddenly surged. This was a signal that participants are comfortable accumulating at this level.

More importantly, the daily RSI appears to have printed a new higher low at 32.6. This is an encouraging sign as it shows that participants are no longer waiting for extreme oversold readings before entering long positions.

The strategy is to buy as close to 0.00245 support as possible. As long as the market remains above this level, it has a very good chance to rally to our initial target of 0.0034 and then 0.0046.

The process may take more than a month.

Daily Chart of NEO/Bitcoin on Binance

As of this writing, the NEO/Bitcoin pair is trading at 0.002574 on Binance.

Summary of Strategy

Buy: As close to 0.00245 support as possible.

Target: 0.0034 first and then 0.0046.

Stop: 0.00234

 

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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3.7 stars on average, based on 253 rated postsKiril is a financial professional with 4+ 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 ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. 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: Litecoin

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The Litecoin/Bitcoin pair (LTC/BTC) dropped to as low as 0.00758498 on September 12, 2018. At that price level, the market was down by almost 70% from the 2018 peak of 0.02499999.

If you’ve been following our trade recommendations, you’d probably know that we like picking altcoin pairs that have suffered heavy losses. That’s because these pairs often have great bottom picking setups. More importantly, the bottom provides the maximum financial opportunity. We’re seeing that shape up in LTC/BTC.

Technical analysis shows that LTC/BTC is carving a bottom at 0.0082 support. While the pair is still trading inside a descending channel, we’re confident that it will break out of the pattern soon. We have a couple of technical reasons to support our view.

First, we can see multiple supports converging at 0.0082. We have the parabolic support, the uptrend support, and then the support of the descending channel. The convergence tells us to expect significantly increased demand at this level.

In addition, LTC/BTC is oversold on the weekly chart. Add the selling relief from oversold conditions to the surge in demand and we might see a breakout real soon. This is something that we’ve already seen in other altcoins such as XRP/BTC and XMR/BTC.

The strategy is to buy as close to 0.0082 support as possible. As long as the market stays above this level, it has the momentum to ascend to our target of 0.0115 first and then 0.014.

The process may take more than a month.

Daily Chart of Litecoin/Bitcoin on Poloniex

As of this writing, the Litecoin/Bitcoin pair is trading at 0.0082053 on Poloniex.

Summary of Strategy

Buy: As close to 0.0082 as possible.

Target: 0.0115 first and then 0.014.

Stop: 0.0078

 

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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3.7 stars on average, based on 253 rated postsKiril is a financial professional with 4+ 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 ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. 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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