So...we had nice rally from the bottom......
S&P 500 kissing 1300......
How far we can go in this rally???
If you focus on S&P 500.....we will be hitting MAJOR resistance just ahead???
What will cause this resistance???
Slightly overbought conditions & Oil & US$ REVERSING.......
Oil has been beaten down to a very UNREALISTIC level of $111???
Why $111 is unrealistic?
Because??
$120 Oil is a "reasonable price" based on where we have been...like $147....
We need $120 oil to encourage exploration & development of Oil Sands projects in Canada....
We need $120 oil to enforce the SHIFT in conservation.....
We need $120 oil to stay away from gas guzzlers like SUV.....
$120 Oil will force ways to be more productive...like a 4 day work week...which will save 20% gasoline for every consumer....which will be a nice savings.....so we work 10 hrs per day instead of 8 hours for 5 days......No loss in productivity !!!!
US$ has also gone too far too fast and need a rest for sideways to LOWER tape.....Please keep in mind I am long US$.......
So.....
If S&P 500 is going to face resistance SOON...then what could be a contrary play????
I am sure most of us have seen serious ROTATION going on in various sector very quickly.....
Contrary play is Solar, Oil,Nat Gas,Gold,Steel,Coal,Ag........as they are all OVERSOLD unlike S&P 500 which IS getting OVERBOUGHT......
As an investor/trader ...we need to LEARN the REALITY of overbought vs oversold...or else you will be sitting in a losing stocks longer than PRUDENT......
Markets have been very TOUGH & will remain SO...as everybody has become either swing or daytrader......I am in the camp of swing trader where my comfort level lies.....
So .....I am following the oversold theory by having the following stocks in my trading portfolio :
SOL.....a very good Solar play......
TLM.....a beaten down Oil & Nat Gas exploration/producing company......
KGC....a Gold producer......
Do NOT run your portfolio based on CNBC or other momentum followers...as momentum is very short lived these days.....by the time you get IN...it is OVERBOUGHT.......
So....do the opposite of shouting pundits.....
Buy early......
Sit tight......
Sell when euphoria sets IN......
Keep repeating the overbought & oversold sector game.....
So...how to detect OB & OS numbers......I go to my old reliable RSI indicator.....
These days RSI do not get really oversold...or overbought range.....they are lower or higher than
90 days range...to reflect QUICK in & out trading.......
So... do some homework on your preferred technical indicators on your chosen stocks & you will get the picture.....
Good luck on another challenging week ....where NEW strategy from last week will QUICKLY becomes OLD....
BLOG does NOT give buy or sell.
Saleem
4 comments:
SALEEM
SOL is up in pre-market
With CNBC pumping energy /solar stocks we may have great day.
My buy price is in the $20's.
I believe that you are in hte green now?
Looking for another move up in Vias and Monsanto today, GS dunno.
SALEEM How is your mother?
I hope well
Hi Madmax,
Mother is doing well and is back to her 60% normal...which is very good.
My cost on SOL is $17.96...a long wait but now in the money....
All oversold sector will come back and I am adding into those areas.
Good luck today !!!!
Saleem
Hi all
be careful in solor sector. Keep tight watch.Sold all solor sector stock ener, sol, solf .Bought CPSL. I may buy back SOL at the end of the day. Good luck to all
Tomorrow will be big for SOL but i am in money and do not want to stuck .
Hi Ds,
Do whatever makes you comfortable.
SOL ER will be HUGE.....so staying put.
CPSL is trying to move UP...looks good !!!
Saleem
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