Appetizing Action in the Miners to Begin 2014

Trading inversely to the major averages, the precious metals and miners gapped higher to begin the new year.

On the ETF for the junior gold miners, on the 30-minute timeframe below, I am looking for $31.20 to act as a concrete floor on any pullbacks, denoted by the lower light blue line. The upper light blue line saw price find some initial resistance this morning in the form of overhead supply at the highs from five weeks ago.

Nonetheless, the action is encouraging, and I have JNUG NUGT back on my radar as long ideas.

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I see that Citi is out upgrading Bank of America to a buy this morning. BAC‘s stock is responding in kind, as you can see below. The big test with these kinds of upgrades is whether the gains can hold by the end of the day.

Other bright spots are the solars, with CSIQ on my radar as a long idea.

VJET is trying to emerge from a sideways base, with takeover rumors hitting the tape there.

A few other names to note as long ideas: LUV WSM, both with strong daily chart setups.

And on the short side, keep an eye on F SBUX for further weakness.

What are you trading this mooring?

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JCP is still a contrarian short squeeze play I like over $9, seen on the first daily chart below.

And WDAY is more of my type of play, basing well in an established uptrend, threatening to break higher yet.

Which tickers are you watching this morning?

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The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday. 

We also discussed the shipping stocks in recent weeks. Currently, I suggest waiting for the many strong stocks in the group, including BALT DRYS DSX NM PRGN TK, to consolidate and offer a secondary, post-breakout entry point in early-2014 after the recent surge higher. 

The Guggenheim Shipping ETF clearly shows a very high buy volume breakout in recent weeks, adding credence to the idea of a major price breakout at hand.

However, to my eye a name like STNG may be the most actionable long idea in the shipper/tanker space headed into this week, over $12, as it is not yet very extended.

The coffee commodity continues to be a contrarian theme from the bullish perspective, given the fierce downtrend we have seen since 2011. The JO ETN needs to hold over $22 in order to give that thesis any credibility. However, I expect a sharp bear market rally up to the 200-day moving average (yellow line), at a minimum in 2014.

And the bond market is certainly an area I have discussed previously in these Strategy Sessions. The 10-Year Treasury Yield Index continues to point to rates moving higher in 2014. The pace at which they move higher may be the true point of contention. If this is a bonafide turning point after a three decade bond bull market, then I suspect the rate of ascent will catch many by surprise by how quickly rates rise. 

Either way, I expect rates to climb to at least the top of the well-defined multi-decade falling channel (top light blue line). 

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It is busy season for fitness clubs across the country, considering New Year’s resolutions are still seemingly attainable and motivation is there for “the new me.” Putting to one side the efficacy of “calories in, calories out,” CLUB is a stock which appears as firm as any in the space, seen on the daily chart below in an established uptrend. I like the stock back over $15 as a long idea.

The brand names which the company owns are strong ones, lending to additional memberships to begin the year, including: New York Sports Clubs (NYSC), Boston Sports Clubs (BSC), Philadelphia Sports Clubs (PSC) and Washington Sports Clubs (WSC).

A stop-loss below $14.20 makes sense.

Drop me your top tickers overnight.

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Back later tonight with some ideas…