Another + update going to the entire list, because it works as commentary on the materials and resources space which, post-election, has assumed a good deal of relevance to many.
Once again, NFTRH+ stands apart from the fundamentals. But I know there are those of you who are bullish on the resources and materials space, especially since the US election and assuming your fundamentals are in order, I’d like to present a stock that has pulled back to what could be considered a buy point (assuming its uptrend is to remain intact). Reference also the work in NFTRH 425 showing that on the big picture, this sector appears to be one with good upside potential relative to the broad market, longer-term.
Normally the SMA 50 (current level) would be a place for bulls to initiate at least a starter position because the MA 50s have contained all downside reactions since the rally started 11 months ago. But the problem is that the throw over above the channel top was caused by unsustainable euphoria based on an inflammatory political event and a lot of associated promotion.
Here we might reference the gold sector, which got too much over bullish promotion and then finally took its first major correction. So I would also look for the channel bottom and even the SMA 200 (currently 14.77 and rising) as potential targets. The lower target, while not seeming to be very probable any time soon, would be a nice clean out of the momentum players populating the sector (and being addressed now). For the reasons stated above I do, however, think the lower channel line is very doable.
RSI has dropped to its lowest level since the reaction began and that too warns of potential for the lower levels to come about.
As a ‘look ahead’, there are no formal buy, sell or stop points because I am trying to give a perspective on a well known company in the space. We will keep the sector on radar in NFTRH reports as well.
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.