Tag: Relative Strength Index (RSI)

Has Gold Suddenly Lost Its Glitter?

Posted on by The INO.com Team

Hello MarketClub members everywhere! Here we are starting a new trading week and the big news is a sharp rally in equities and a big pullback in gold. The question on everyone's mind is, "is this for real or just a rally in a bear market in equities and a pullback in the bull market for gold?"

Gold

Let's take a look at gold, first of all. I believe that the gold (FOREX:XAUUSDO) market has finally come to life again after hitting a peak in August 2011 and then losing the half its value over a period of four years.

Looking at a long-term chart of monthly gold prices you can see that (2) was the first time that gold had moved below the RSI 50 line. This long-term indicator was showing you that gold prices were in serious trouble. It is also worth noting that the RSI indicator (3) has stopped every rally in gold. I expect to see more consolidation in this market and then see gold break over its resistance at the RSI 50 level. When that happens, expect to see a potential multiyear bull market to take place in gold.

Monthly Chart of Gold

Continue reading "Has Gold Suddenly Lost Its Glitter?" →

Can Google Overcome Apple As The Most Valuable Company In The World?

Posted on by The INO.com Team

Welcome to the first day of trading in February. If it is anything like January, it's going to be quite a month.

After the close today, Alphabet, Inc. (NASDAQ:GOOG) will announce its earnings. If it is a blowout and Google surges $25, it will then become the most valuable company in the world - not bad for a company that was founded on September 4, 1998 and has only been around for 17 years. It took Apple, Inc. (NASDAQ:AAPL) which was founded April 1, 1976, almost 40 years to become the world’s most valuable company.

Today, Google flashed a buy signal putting both the monthly and weekly Trade Triangles in unison. That indicates there are good odds that Google will beat its earnings estimates after the close. There are no guarantees, but the odds would favor being long Google before the close.

Let's take a look at the rest of the markets which are not having such a good time of it. The dramatic rally on the last day of trading in January was more a function of short covering than anything else. Most stocks and indices are in a longer-term bearish trend based on MarketClub's Trade Triangle technology. Continue reading "Can Google Overcome Apple As The Most Valuable Company In The World?" →

This 'Hated' Stock Might Be The Right Fit For Your Portfolio

Posted on by Daniel Cross

Daniel Cross - INO.com Contributor - Equities


There's a popular myth on Wall Street about short sellers being the smartest guys in the room. After all, stocks, in general, do tend to appreciate over time, but picking stocks that fall requires a bit more homework and skill. But short activity in a stock isn't always a good thing.

When enough short sellers team up on a stock and it happens to post better than expected results, they either bail out at the first opportunity or run the risk of getting caught in a short squeeze. If the stock appreciates too much too fast, they'll get called out of their positions creating an event that turns into massive buying on an already hot stock that can cause a quick spike in value.

For one stock, a slew of bad news seemed like the ideal playground for initiating a short position. Continue reading "This 'Hated' Stock Might Be The Right Fit For Your Portfolio" →

An Unlikely Hero For Your Portfolio

Posted on by Daniel Cross

Daniel Cross - INO.com Contributor - Equities


The markets have been anything but predictable just a few weeks into 2016 and investors are wondering if we're on the verge of a major bearish reversal or it's a temporary correction. Oil seems to go lower and lower despite with no sign of stopping anytime soon while the economy is still reeling from the loss of Chinese demand and the impact of the first Federal Reserve rate hike. For investors, there's no better time to start getting defensive.

When uncertainty reigns in financial markets, certain sectors become safe havens. Companies that offer products that are used regardless of the state of the economy like healthcare and consumer staples tend to outperform during these times. These types of stocks generally carry a dividend yield as well which helps protect investors from downside movements.

The consumer staples sector is particularly attractive in the very beginning of a possible bear market because it's historically provided relatively high returns with low volatility. While most investors think of this sector as “boring” filled with plain vanilla stocks and companies, it's actually one of the highest returning sectors in the market regardless of economic direction.

Annualized returns by sector from 1962 to 2015 revealed that consumer staples generated gains of 12.9% – trailing just slightly behind healthcare. From a volatility standpoint, consumer staples had the second lowest with utilities being the least volatile. Continue reading "An Unlikely Hero For Your Portfolio" →

A Deep Value Play Investors Shouldn't Overlook

Posted on by Daniel Cross

Daniel Cross - INO.com Contributor - Equities


The Fed might have finally raised rates this month, but it isn't a magic spell that automatically means that the global economy is strong. Oil is once again the leader of a sudden an aggressive bearish sentiment on Wall Street and stocks are suffering as a result.

The state of the global economy going into 2016 is still in question with energy markets yet again being the biggest concern for investors. The slowdown hasn't been kind to sectors like manufacturing either with many companies closing their doors or merging with other businesses in order to stay afloat. Those that have survived though have come out the other side sleeker, stronger, and have fewer competitors. Continue reading "A Deep Value Play Investors Shouldn't Overlook" →