Is The Bitcoin Crash Over?

Posted on by Matt Thalman

The cryptocurrency Bitcoin hit its most recent all-time high just over a year ago, on November 10th, 2021, at $69,000 per coin. More recently, Bitcoin was trading in the $16,000 range, that's more than a 76% decline.

Long-term Bitcoin bulls will be quick to point out that since its inception, Bitcoin has experienced other declines that fall within the same percentage drops. However, knowing that type of move has happened in the past, and the cryptocurrency rallied back probably doesn't help those who bought Bitcoin up at the highs feel much better about their investment.

But what about if you have been sitting on the sideline, waiting for the right time to buy Bitcoin? Is today a good time to buy the cryptocurrency?

For all the bulls out there, I already know I have been wrong about Bitcoin in the past, and I am wrong again this time. But hear me out before you write me off. I believe there are a few reasons why we have not seen the bottom of the current Bitcoin crash.

First and foremost, we are heading straight toward a recession. You may not want to believe it or face reality. Still, it is coming.

Just last week, Federal Reserve Chairman Jerome Powell told investors that the likelihood of a soft landing was rapidly diminishing. Inflation is still high, and Fed Members have made it clear that bringing down inflation is the most important problem to tackle now. And despite interest rates at levels we have not seen in a decade, the Fed believes we will still need more increases in the coming months.

The coming recession is important for Bitcoin's price because up until this point, Bitcoin has not proven to be a "safe haven" asset.

Furthermore, even gold, an investment that most investors would consider pumping money into during uncertain economic times, has not been rallying during this market downturn.

Many investors point to the fact that the dollar has strengthened as one reason why gold and cryptocurrencies are down. A strong dollar could be due to Treasury bonds paying higher and higher yields. The world considers the US Treasury Bond as the baseline for a zero-risk investment. And with T-Bond yields going higher in 2022, investors worldwide have been flocking to both the dollar and T-Bills. Continue reading "Is The Bitcoin Crash Over?" →

Which Is The Better Gold Mining Stock?

Posted on by Taylor Dart

While the general market (SPY) has suffered two violent legs down in its cyclical bear market, the Gold Miners Index (GDX) has suffered three legs down and has seen a much more violent bear market.

This has made the sector fertile ground for new investment ideas relative to other sectors. Still, with mining being a complex business and the gold price being quite volatile, the key to outperformance when dabbling in the sector is to own the highest-quality names.

In this update, we’ll look at two of the largest gold miners globally and determine which is the most attractive name from an investment standpoint - Agnico Eagle Mines (AEM) or Newmont Corporation (NEM).

Scale & Business Model

Newmont and Agnico Eagle Mines (“Agnico Eagle”) share very similar business models, given that they are two of the world’s largest gold producers that receive over 90% of their revenue from gold with limited contributions from other metals.

In Newmont’s case, it is the world’s largest gold producer, with 15 operating mines in Africa, North America, South America, and Australia, and annual production of 6.0 million ounces of gold (+ 1.3 million additional gold-equivalent ounces).

Meanwhile, Agnico Eagle has 13 mines across Canada, Finland, Australia, and Mexico and expects to produce 3.4 million ounces of gold this year.

Based on Newmont having slightly more mines (15 vs. 13), double the production profile, and having a massive development pipeline with over ten projects, it certainly wins from a scale standpoint. This slightly edges out Agnico Eagle’s smaller production profile and less robust development pipeline, though Agnico Eagle still has one of the best development pipelines among its peers.

It is also worth noting that while Agnico Eagle has a smaller production profile and slightly less diversification, its jurisdictional profile is superior, with 95% of future production coming from top-rated mining jurisdictions.

That said, Newmont wins by a hair in this category for investors looking for a global producer with diversity. Continue reading "Which Is The Better Gold Mining Stock?" →

1 Stock You Should Think Twice About Buying

Posted on by The MarketClub Team

E-commerce and tech giant Amazon.com, Inc. (AMZN) guided a slowdown in sales growth for the holiday season, making investors anxious. The company expects net sales between $140 billion and $148 billion for the year's final quarter, below analysts’ expectations, representing a year-over-year improvement of as little as 2%.

“We are seeing signs all around that, again, people’s budgets are tight, inflation is still high, energy costs are an additional layer on top of that caused by other issues,” Amazon Chief Financial Officer Brian Olsavsky said. “We are preparing for what could be a slower growth period, like most companies,” he added.

AMZN’s shares plunged substantially following the gloomy forecast and are hovering around its 52-week low. The stock has slumped 46% year-to-date to the last trading session at $89.98, well below its 50-day and 200-day moving averages of $116.72 and $130.19, respectively.

AMZN Chart

Source: MarketClub

AMZN’s market cap recently slipped below $1 trillion.

How soon do you expect the stock to rejoin the "Trillion-Dollar Club"?

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AMZN has been trying to navigate the macroeconomic headwinds and hosted two cornerstone sales events in a year: Prime Day in July and the Prime Early Access Sale last month. Continue reading "1 Stock You Should Think Twice About Buying" →

2 Oil and Gas Stocks for the Long Term

Posted on by The MarketClub Team

With fast and furious rate hikes yet to succeed in bringing inflation under control, the stock market is expected to witness further volatility. However, the energy sector remains well-positioned to thrive with tight supply and rising global demand pushing oil prices higher.

While OPEC+’s decision to cut oil production by 2 million barrels/day and limited availability of Russian oil will keep supply tight, OPEC expects global oil demand to increase to 103 million barrels per day (BPD) next year.

When do you think the global oil demand will peak?

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Besides being the relatively cleaner alternative among fossil fuels, the natural gas liquid market is set to grow at 5.7% CAGR to reach $29 billion by 2030. Hence, it would be opportune to capitalize on the industry tailwinds and load up on oil and gas stocks Diamondback Energy, Inc (FANG) and Baker Hughes Company (BKR) as some technical indicators point to solid upsides.

Diamondback Energy, Inc (FANG)

FANG is an independent oil and gas company with a market capitalization of $34.89 billion. The company is involved in acquiring, developing, exploring, and exploiting unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It operates through two segments: the upstream segment and the midstream operations segment.

Over the last three years, FANG’s revenue grew at a 44% CAGR, while its EBITDA grew at 41.7% CAGR. Over the same time horizon, the company’s net income grew at a 67.2% CAGR.

During the third quarter of the fiscal year 2022, ended September 30, FANG’s total revenues increased 27.6% year-over-year to $2.44 billion. During the same period, the company’s income from operations increased 38.7% year-over-year to $1.61 billion, while its adjusted EBITDA increased 68.2% year-over-year to $1.91 billion.

FANG’s adjusted net income for the quarter came in at $1.14 billion or $6.48 per share. Due to high cash margins, and best-in-class well costs, the company generated nearly $1.2 billion in free cash flow, of which it returned around 75% to shareholders through share repurchases and dividend payouts. Continue reading "2 Oil and Gas Stocks for the Long Term" →

These Stocks Are Falling Knives

Posted on by Aibek Burabayev

It is good to see a Head and Shoulders pattern in the making and to see it in the final stage is great luck. Fortunately, I spotted one such pattern in the chart of the Tesla (NASDAQ:TSLA)TSLA Weekly Chart

Source: TradingView

The stock price of Tesla has been trading in a big range between $180 and $414 after it managed to break above the Y2020 top of $167. Peak points were distributed unevenly as we can see the lower tops on both sides of the all-time high. This has shaped a notorious Head and Shoulders pattern on the weekly chart.

We saw this model in the Ethereum and AMD charts this year.

The model is clear; it has slightly up-sloping angle as the Right Shoulder is located higher than the Left Shoulder. A Neckline has been built through the valleys of the Head. The stock price has been hovering here for some time.

Last week, the market closed below the Neckline triggering the bearish signal.

The target of this pattern is located in the negative numbers area so I skipped it. Instead, I highlighted three potential supports that could stop the upcoming collapse.

The first support is located at the peak of August 2020 at $120. It was broken to the upside and then it was retested by a huge consolidation.

The next support comes from the top of February 2020 at $65. The price has been struggling to overcome it for a long time. The book value level of $13 is the ultimate support based on fundamental data. Continue reading "These Stocks Are Falling Knives" →