If you haven't been paying attention to the gold (NYMEX:GC.Z16.E) market, you may have missed one of the most interesting moves of the year. As all the major indices have been trending lower gold has been doing just the reverse.
Here are the three positive indicators I see.
Continue reading "Three Indicators That Say Gold Is Headed Higher"
The background for the copper market is not brighter these days as the macroeconomic data of the top metal consumer - China points at the cooling economy. Asian traders stored up the metal at the start of this year, pushing the price above the $2 mark to a high of $2.3. Nowadays weakening demand puts pressure on copper prices as the Chinese currency hit a 6-year low against the dollar which makes the import more expensive.
Chart courtesy of tradingview.com
Copper’s price has been descending within an orange expanding downtrend for the past two years. The Contracting Triangle pattern (highlighted in blue) reflects the sideways structure of the market this year. Continue reading "Freeport-McMoRan Could Be In Trouble As Copper Approaches A Decision Point"
By: Michael Kahn of Street Authority
Trading countertrend moves can be profitable but risky, so it pays to line up as many factors as possible in our favor before putting money to work.
When a stock sports a price-to-earnings (P/E) ratio that even a technical analyst such as me thinks is low, it's worth a look. When it is oversold at support, I'll get interested. And when the price of its main input commodity starts to fall, I'll consider a quick snapback trade.
This is the case with American Airlines (Nasdaq:AAL).
I will admit that as a chartist, looking at fundamentals gives me the willies, but AAL has a trailing P/E ratio of just 3.1. That's not only insanely low compared to the SP 500, which has a P/E ratio of 19.1, but it's less than half of the industry average of 6.3. Even based on next year's earnings, AAL trades at just 5.7 times estimates.
The stock has fallen more than 20% in the past month and a half, but the recent drop in oil prices following a multimonth rally could result in a short-term pop in AAL.
Oil prices cratered 2.5% Tuesday on expectations that U.S. crude inventories hit a new record high. This was the third straight session of losses, and oil prices are now more than 5% off their 2016 highs made last week. But AAL's action on Tuesday leads me to believe this could be a great spot to enter a quick bullish trade. Continue reading "Oversold Airline Ready For A Quick Rebound"
Long-term value investors understand that truly profitable trends can take time to build up. Stock market sectors wax and wane with the economy and flow along the curvature of the business cycle, but others don't necessarily obey the same rules.
There's an old saying by Mark Twain, “buy land – it's the one thing they’re not making any more of.” Value investors can take it one step further, though. Arable land is limited, and the global population is growing. That makes food production a critical industry that will continue to be relevant regardless of economic direction.
Low oil prices translate into higher consumer spending which benefits food production companies as well. As a defensive non-cyclical industry, demand stays relatively constant regardless of how the economy is performing.
A rising tide lifts all boats, and the food industry is getting quite a lift lately. Several companies have raised guidance for the next quarter, and a number of analysts have upgraded the industry's outlook going forward. Continue reading "This Stock Could Feed Profits Into Your Portfolio"
Value investors know that the long game is important when picking a stock. Short term gains fluctuate, but solid fundamentals mean that a company will outperform over the long-term regardless of temporary ups and downs in the market.
A few decades ago the field of technology was in its infancy and the computer space was considered highly risky and volatile. Of course, anyone who bought into companies like Apple or Intel back then are certainly reaping the rewards today.
Technology is still an investor's best bet for finding the next breakout industry. Right now IoT (Internet of Things) is the frontrunner with advances being made in data storage, infrastructure, and other forms of "smart" tech. Big data stocks and chipmakers have already seen big gains in the past couple of years and should continue to thrive. But there's another industry that looks very much like computers did back in the late 70's and early 80's – spaceflight.
The introduction of commercial space agencies is brand new. Richard Branson helped kick off the new space race with his Virgin Galactic company and now Elon Musk and Jeff Bezos have joined in with their SpaceX and Blue Horizons companies.
While still privately owned entities, there are still ways for investors to hop aboard this exciting new enterprise. Satellite telecommunications hasn't been an industry in focus for Wall Street analysts, but rapidly growing interest in spaceflight and space-related technology means that these companies may be about to enter a new bullish environment that could last decades. Continue reading "A Value Stock That's Out Of This World"
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