Not much happened in the markets yesterday, and probably not much will happen today either. People are just marking time before tomorrow’s Fed meeting, although gold is trading back up towards $1350 before the open.
But here are some interesting charts of note – for both bulls and bears.
First is TSLA.
Many p love to trade because it makes big moves up and down. It collapsed after it’s last earnings report to begin a vicious downtrend, but got so oversold in June that if finally began a bounce.
Look for this rally to run out of steam in the 240-254 area – the zone of its downtrend resistance line and the retracement level of the December high and June low.
I’d look to short it next month or bet against it with put options as it is a troubled company.
For bulls though take a look at this REIT paying a 7% dividend.
OHI operates a chain of nursing homes and assisted living centers. When interest rates go down some investors pile into high dividend paying stocks for a search for yields.
OHI is not the only defensive stock now running. So it Doctor Pepper.
KDP also makes those coffees some people are addicted to.
And finally I want to point out to you CROX as the type of stock to avoid at all costs.
CROX has been in collapse and dumped again on Monday even though the stock market was up.
Notice that it’s relative strength plot on the bottom of the chart has been in decline all year. Stocks that lag the market like that become dangerous to hold on to.
Generally speaking, you want to buy stocks that lead the market and avoid those that lag. As you can see the relative strength indicator began to fade in January well before the CROX May dump.
The place to be buying is in the leading sectors – and right now it’s defensive plays leading. Bonds are soaring, high yield stocks are doing good, and so is gold and silver.
In the video I did Monday I talked about a gold mining stock that is leading that is one of my top Seven Trading Positions in the Power Investor Group.
If you missed that video watch it here: