Friday, March 20, 2015

Market Review: Shits n'Giggles (UNG, ERX, DRN)

Below I have identified a number of opportunities in the market that I feel my readers could benefit from. These recommendations are being made over the short to medium-term time frame and look to take advantage of the recent delay in interest rate increases signaled by the Federal Reserve Bank on Wednesday. Our recent correction over the last few weeks I feel signals an intermediate bottom with new highs being made over the coming months. From there however, ominous signs of a larger and broader market correction seem to be emerging (there was a fabulous blog posted about this by I can't for the life of me find it again). Warnings have also been made on the talk-show circuit by numerous hedge fund managers, a former FOMC chief, and a slew of billionaires.

Giggles: Natural Gas (UNG, UGAZ)
I have been waiting for this for some time! I have included in the picture below my momentum indicators that I believe show a very steady and consistent increase over the last three to four months. More recently I identified a diagonal resistance line eminating from a series of lower-lows. This line was breached on Wednesday and we have since had two (barely) closes above it. Point and figure charts have this going to around $17.00. Additionally my indicators are all ideally positioned at the moment:
  • StochRSI (14) is above 50%
  • KST is crossed up and about to cross above the '0' line
  • Momentum indicators have been setting up divergence for a while

Giggles: Real Estate (DRN)
DRN has something I have also been following closely but stupidly closed out my positions in. I became interested in it when I noticed a convincing break out of the declining red channel was made. Already being above the MA(144) with imminent crossovers of the EMA indicators this looked like a strong buy to me. The point and figure charts have this going to $116.00.

Giggles: Energy (ERX)
This one seems slightly paradoxical given the fall of crude oil and natural gas over the last few months. This recommendation is speculative as we are still below the MA(144) but closing in fast. A higher low has also been made  along with favorable divergence on the long term MACD indicators. There is also a coincident breakout of the long term down trend. The EMA's are almost favorably configured. A little patience is required but I think ERX will emerge shortly looking quite good.

Jakob Richardson © 2015