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Wallstreet Traders Report June 11th
Shares in the social media giant Facebook (FB) increased 4.6% at the close of trading on Tuesday. This increase was on the back of the announcement a PayPal head will join the company to head it’s messaging products division.
The share price below shows the recent price action with a strong breakout from recent congestion. The breakout occurred on relative strong volume which adds to the bulls conviction to rise the share price.
Traders can look at entering a long position with a target price close to the March high of $72.00. Stops can be placed under the most recent congestion low of $62.00.
EQT Corp (EQT)
EQT Corp. is an integrated energy company. The company engages in natural gas and liquids. It conducts its business through three business segments: EQT Production, EQT Midstream and Distribution.
EQT reported its quarterly earnings on Thursday which came in above analysts estimates. Adjusted Earnings Per Share increased 103.57% to $0.57 in the quarter versus EPS of $0.28 in the year-earlier quarter. Revenue rose 53.97% to $520.1 million from the year-earlier quarter.
These numbers were clearly positive news for the stock as its share price increased on Thursday by $4.03 (4.95%) to close at $85.52.
The price chart below shows the shares have been in an uptrend for the past few months. Prior to the earnings announcement the share price consolidated sideways to form an ascending triangle. Yesterday prices broke through and closed above the resistance level to form a new high. The bullish breakout occurred on very strong volume as seen below the chart. This is a bullish signal and I expect the share price to continue up from here.
For this trade I will place a buy limit at the resistance level of $84.00. My protective stop loss with be under the previous pivot low as show on the chart.
For several weeks I have been posting my Facebook trade on this website. My initial entry was on June 11th based on a down trend channel breakout. On Wednesday Facebook announced better than expected earnings for the past quarter with increased revenue from their mobile platform. This had the result of rocketing the share price to above $34.00.
I manged to exit this trade at $33.50 yesterday for a profit of $9.40 per share bought. If only all trades ended like this !
Dow Jones Index
The US markets have enjoyed a good bullish run over the past 2 weeks.
The Dow Jones Index closed on Thursday at record highs. This was as a result of the comments made by Federal Reserve Chairman Ben Bernanke who said the U.S. central bank will keep a loose monetary policy for some time to lower the unemployment rate. Several weeks ago the markets were concerned that federal support in the form of monetary stimulus policy would be cut back in the next 12 months. Markets have now been buoyed by his recent comments that this may take further time to eventuate
The Dow Jones industrial average rose 169.26 points or 1.11 percent, to 15,460.92. The S&P 500 gained 22.4 points or 1.36 percent, to 1,675.02 and the Nasdaq Composite added 57.55 points or 1.63 percent, to 3,578.3.
The daily chart of the Dow below shows the close at an all time higher. The market did temporarily test higher prices in late May but closed lower (circled areas). Given the bullish momentum the expectation is for this market to continue to rise. Any retracement downwards is likely to be supported at 14,900.Support come in at 14,900.
I posted a chart for Facebook (FB) shares 2 days ago showing the breakout from the ascending triangle. This has continued to gain momentum and Thursday there was the formation of a pinbar candle. I expect prices to keep rising from here. Any retracement lower should be held up by $25.15 resistance/support level. I have moved my stops up to just below this level to protect my profits.
Since my last updated post on The Dow Jones Index there has been a steady uptrend in place and the markets have turned bullish. Reporting season started this week with Alcoa (AA) announcing improved earnings for the quarter. The general view from analysts is for most companies to report second-quarter earnings to be soft with weak sales, but expectations are for earnings to pick up in the second half of this year. If companies start to report better than expected earnings then the general market indices will start to rise in line with this.
The markets have now risen for the past 4 days. Overnight, The Dow Jones industrial average gained 75.65 points, or 0.50 percent, to end at 15,300.34. The Standard & Poor’s 500 Index rose 11.86 points, or 0.72 percent, to 1,652.32, the highest close since the end of May. The Nasdaq Composite Index climbed 19.43 points, or 0.56 percent, to close at 3,504.26.
The chart below shows the 4 hour chart of The Dow Jones Index. It shows the index had no trouble breaking through the psychological 15,000 level and is now testing the 15,300 resistance level it last touched on June 18th. If the index can breakout from here the next level of resistance comes in at 15,500. The 20 and 50 period moving averages have crossed as I have highlighted on the chart which is a bullish sign.
Below is a chart for Facebook (FB) shares. I have shown this chart as it highlights an ascending triangle breakout pattern which was triggered today. I currently hold these shares after a more risky setup on June 10 when the share price broke out from a trend channel as circled on the chart. Traders can get into this share based on the breakout pattern currently identified. Stop loss can be placed under $24.00.
I currently hold 3 positions after being stopped out of CF Industries last week. It was a difficult week for traders given the lack of conviction of the US markets and the drop in the Dow Jones Index (DJI). My positions followed the DJI down so I am hoping for a rebound in the Dow this week which may allow my positions to return to profit.
Below is an update of my holdings and their charts.
CF Industries (CF)
I moved my stop to below the most recent low. I was stopped out last week.
Apollo Group (APOL)
My target was 10 cents off from being hit. This retraced last week and is forming a bullish flag. I have moved my stop to break even.
Liberty Global (LBTYA)
After breaking out from the trend channel this failed to continue rising and subsequently retraced and is now testing the support level again. I have my stops under this support level.
As I mentioned last week this was a higher risk trade so I only had half more normal amount at risk. the trend channel breakout has stalled but is still trading above the gap formed on the breakout day. I have my stops under the low but depending on the general market action this week I may tighten my stops and get out sooner given the lack of follow through after the breakout.
Stay tuned for more charts tomorrow before the opening bell of the NYSE for a list of chart pattern setups for US listed shares.
I currently hold 4 US stocks. Below shows the entry points , reasons for entry , stop loss levels and target prices.
Cf Industries (CF) long entry May 10th based on breakout from resistance of inverse head and shoulders. I have moved my stop and I am looking for a breakout of the $200 resistance to continue the up trend.
Apollo Group (APOL) Long Entry June 5 after an intra-day breakout of the bull flag. Close to hitting my target of $23.00 yesterday. Stops moved to breakeven.
Facebook (FB) Higher risk setup given the down trend. Long entry based on breakout from trend channel. have only risked 1/2 normal amount on this trade. Stops below the most recent lows.
Liberty Blobal (LBTYA) long entry based on bullish breakout from trend channel. Stops placed below most recent lows.