Author: The INO.com Team

Understanding the Basics of Technical Analysis

Posted on by The INO.com Team

Whether you are trading stocks or currency, technical analysis is an advanced tool used to try and predict changes in your market and trade accordingly.

At the base of technical analysis is price history. You are studying the price of a currency, it’s up and downs, and looking for an obvious indicator that will tell you when another up or down is coming up. Think of it like trying to learn to read tea leaves to see the future – except there is real science behind it.

Using Charts For Technical Analysis

The most basic tool for technical analysis is your chart or graph. Whether you are looking at a line graph or candlesticks, the Forex trading chart is giving you a wealth of information. First, you can check the support and resistance. These are the points where it seems that the currency pair won’t cross. Is there a certain range in which the currency is moving? When you see a price making sudden movements in that range you can use the support and resistance to predict when it is going to change its direction again.

Trend lines can be used when there is a definitive pattern that you can follow. You can chart the trend line if it is moving in one direction to predict where the price is going to go using indicators.

For example, let’s say you are studying a candlestick chart -which you should as they give you more indicators in one convenient place. This type of chart can help you to find trends that indicate a major reversal is about to take place. One indicator you can look for is what traders refer to as “three white soldiers” which indicate a bullish reversal is pending. Continue reading "Understanding the Basics of Technical Analysis" →

Semiconductor Equipment Sector Update

Posted on by The INO.com Team

By: Gary Tanashian of Biiwii.com

NFTRH 322 covered the usual range of markets, from US to global stocks to precious metals and commodities to currencies and indicators.  It also included an extended economic discussion about the realities of the strong US economy and its dangerous underpinnings.

The economic segment began with this look at the Semiconductor Equipment sector, which was our first indicator on economic strength exactly 2 years ago and will be an initial indicator on economic deceleration when the time is right.

Excerpted from the December 21 edition of Notes From the Rabbit Hole, NFTRH 322:

Checking the Semiconductor Book-to-Bill ratio (b2b), this all-important forward looker came in pretty decent for November.  Per the data we reviewed in an update last week, the bookings, which is the most important component, was pretty good at $1.22 Billion compared to October’s $1.1 Billion.

The graph from SEMI does not include the November data.  I added an arrow showing the current level of the b2b.

semi.b2b

Our original graph is marked up as well to show the longer trend.  There is a spike up happening and this may or may not be related to an overall year-end sales spike in some high end capital equipment that happens like clockwork at the end of each year in Machine Tools (ref. sales graph below).  I do not have the level of knowledge about the Semiconductor Equipment industry to speak authoritatively about its more structural capital spending cycles.  So this is just a possibility to consider. Continue reading "Semiconductor Equipment Sector Update" →

Manitex (NASDAQ:MNTX) Looks Primed For Excess Returns

Posted on by The INO.com Team

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In theory, the price of any stock represents the present value of future cash flows. When those cash flows (i.e. earnings per share) are undergoing a contraction, the share price should theoretically decline. Occasionally, a share price will fail to reflect a future rebound in earnings growth that's expected to occur. In such a scenario, the intelligent investor takes notice. He knows that if projections are indicating a future rebound in earnings, then he can expect a future rebound in the stock price as well. He's aware that, in this instance, the further the share price declines today, the larger the percentage gain investors will see tomorrow. Thus, the stock is an obvious buying opportunity.

Let us turn our attention to Manitex International, Inc. (NASDAQ: MNTX), a provider of engineered lifting solutions. The company is currently valued at a market cap just north of $150M. Like many fast-growing small cap stocks, MNTX has seen plenty of volatility in both its earnings and share price.

MNTX chart

With full-year EPS expected to contract by 17.5% YOY (from $0.80/sh to $0.66/sh), the stock is trading roughly 38% below its 52-week high. Furthermore, its P/E ratio of 15.6 is in the lower echelon of its long-term range, which would seem to imply a further earnings contraction to occur beyond 2014. Continue reading "Manitex (NASDAQ:MNTX) Looks Primed For Excess Returns" →

The 5 Keys To Trading And The 1 Key To Your Success

Posted on by The INO.com Team

Like life, there are certain trading rules that you have to follow if you want to be successful. The following 5 trading rules and the 1 key to success are used in one way or another by every professional trader I know.

For those members that have been with us for a while, you may have seen these rules before. For those members who have recently joined MarketClub, you will find these 5 trading rules and the 1 key to success to be an important building block to your future success.

Rule #1: Attitude

Attitude is so important in your approach to investing and trading.

Rule #2: Game Plan

Trading without a game plan is like crossing the ocean without a compass, you are going to get lost and run into a lot of problems without a game plan.

Rule #3: Trend

I'm sure you have heard the expression, "the trend is your friend." Well, truer words were never spoken in trading. This article will show you how to quickly determine the trend in any market. Continue reading "The 5 Keys To Trading And The 1 Key To Your Success" →

Weekly Futures Recap With Mike Seery

Posted on by The INO.com Team

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the February contract are trading below their 20 and 100 day moving average settling last Friday in New York at 1,222 currently trading at 1,196 continuing its long-term bearish trend as I’m currently sitting on the sidelines in this market as volatility is too high and the price remains extremely choppy as we head into the new year. Gold prices rallied as high as 1,240 last week before settling back despite the fact that the stock market had a wild ride but the interest still is in the S&P 500 which looks like it’s going to close right near another record high today. The problem with the gold market is the ETF market in gold might be sold come year end for tax purposes and when that happens the ETF than has to sell the futures contract so I still think lower prices are ahead but this market is difficult to trade at the current time so move on and find a market that is trending strong in one direction. The U.S dollar hit another multiyear high which is generally pessimistic commodity prices and especially precious metals prices, however with turmoil in Russia gold prices have been extremely volatile with many $30/$40 price ranges on any given day so if you do trade this market make sure you place the proper amount contracts limiting risk to 2% of your account balance as I have to admit it’s fun to watch but I remain on the sidelines until a true breakout occurs. Rumors of Russia having to sell some of their gold reserves sent gold prices down nearly down $30 in Wednesday’s trade however that rumor has not been verified at the current time but with the problems in Russia it would not surprise me about anything.
TREND: MIXED
CHART STRUCTURE: POOR Continue reading "Weekly Futures Recap With Mike Seery" →