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We have been providing the highest quality trader resources available anywhere since 1999, when we launched our trading cooperative as a place for new and experienced traders to freely share ideas. Over the years, TraderInsight.com has evolved into providing more educational resources to traders at all levels of professional development. Our core philosophy has always been strategy, discipline, results. Our passion is trading, and our goal is to provide the best trader education available anywhere, at any price. Our focus is rooted in a basic principle espoused by Adrian Manz’s late mentor Peter F. Drucker – “What is our business? Who is our customer? What does our customer consider value?” Answering these questions correctly, and providing our customers with the best products, and the best value in trader education is our mission.

Feb. 24 Chart of the Day – DE

After a substantial run, Deere (DE) is just starting to fall apart at substantial resistance points going back 10 years. MFI has already turned south. And it’s only a matter of time before MACD and RSI turn lower, too.

Worse, after beating earnings by 35%, the company saw a 43% decline in net year over year. It also warned of a difficult 2015. Downside here has only just begun.

Sadly, many investors are about to lose big here after following Warren Buffett into the trade in recent days. Buffett now owns 5%, or 17.1 million.

I doubt he’s concerned about the latest chances for a big pullback, though.

He’s more interested in what the stock can do over the next 18 years, not the next 18 days.

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DE 5-year Chart

 

Feb 19 Chart of the Day – DJIA

I say this at every top. Be cautious.

We’re about to take a bad dive to the 200-day moving average in early March, especially if Greece and Europe can’t come to an agreement.

I’ve been watching the market with great concern, as the major indices challenge heavy triple top resistance with bearish signs on MACD, MFI and RSI beginning to emerge.

If this top gives way with no real sustainable news or momentum, the Dow could easily reverse back to its 200-day moving average. I’ve seen this happen -- and play out the same way – going back to late 2013.

We also have to consider the likelihood for greater volatility if oil continues to fall, and if the Greece bailout talks fail to result in anything positive by March 1, 2015 deadline. The Greek government has fully rejected an extension so far.

Europe is already on the brink of depression. If this Greek issue is not resolved by the set deadline, it could set off a firestorm all over Europe.

I have a feeling things will not end well.

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Feb. 18 Chart of the Day Special: How Professional Traders Trade The News – JUNO

If you have ever wondered about the impact of news on the price of a stock, then this article should be of interest to you. Even if you are not an active trader, news events drive price in ways that many investors and traders do not expect. Much of the surprise comes from the fact that they are getting their news from television, online versions of print media, or from online blogs. But where do these news outlets get their news, and why has price usually made a big move by the time that they are telling us to expect it.

If you are an active trader or investor, and want to get ahead of the curve when it comes to capitalizing on news events, then wire services like Trade The News (tradethenews.com) can be your best friend. They get alerts out to clients on a time scale that can never be replicated by traditional media, and also provide insight into the directional bias of the general markets via squawk feeds from Wall Street trading pits.

This morning for instance, the following alert came across the audio news wire and set the stage for a trading opportunity:

8:48 JUNO Hearing strength attributed to circulation of positive financial blog mention
- Source TradeTheNews.com

The early word on the street was that takeover chatter was once again circulating on JUNO and, long before this would receive mention in conventional media outlets, the wire service alerted us to the potential for a trading opportunity.

The chart in figure 1 shows what was happening with price of JUNO when the news hit. Note that as the initial alert was issued, price had already made a significant move higher (1), with share prices climbing from $41 to $42. By waiting for price to retrace lower, traders have the ability to enter after a price improvement is in place. The problem for most of us is figuring out where that retracement should take price, where to place a profit target, and where to place a stop. In the case of JUNO, the move back down was to the $41.47 floor trader pivot. This provided a great opportunity to buy for an expected move higher, with a maximum stop loss just a few cents below the $41.47 line.

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Figure 1 – Juno Therapeutics Inc

So far, we have a plan for entry, and a plan for what to do if things go wrong. The next critical component determines what to do if things go right. In figure 2, we see a common technical tool, Fibonacci price projections, deployed to give us an idea of where an initial profit target might be placed. In this case, $42.38 is the first target. With a $41.50 entry, this represents a $0.88 per share profit, and that something that will make just about any active trader very happy.

Readers who would like to see how these types of targets are developed and used can watch one of my many videos on the topic. Please remember that these price projections represent a great way to plan both intraday and swing trades.

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Figure 2 – JUNO Profit Target

 

Finally, in Figure 3, we see how the trade played out. By taking profits at the target, we missed out on some additional profitability, but we also traded by some very good, rule-based techniques. JUNO generated everything that we planned for, and provides a great example for all of you less active investors out there of how active traders make their living in the markets.

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Figure 3 – JUNO Trade Reults

 

This Chart of the Day installment is a little different than what we usually provide here. It is not focused on big-picture swing trading moves, but rather gives you an idea of how we make our living as traders. If all of this is of interest to you, I encourage you to join us in TraderInsight.com’s online stock chat, The War Room, for great trading ideas every trading day from 9:00 am – 10:30 am ET.

Good Trading,
Adrian Manz

Feb 13 Chart of the Day – CSCO

Cisco hits 52-week high after Q2 results beat expectations, dividend raised 11%.

Last night, Cisco (CSCO) reported Q2 adjusted earnings per share of 53c and revenue of $11.94B, topping analysts’ consensus estimates of 51c and $11.8B, respectively. Cash flows from operations were $2.9B in Q2 versus $2.5B in the prior quarter. The company repurchased about 44M shares of stock in the quarter at an average price of $27.63 per share. CSCO revenues grew 7% and delivered strong EPS growth. Looking to Q3, CSCO forecasts EPS of 51c-53c and revenue growth of 3%-5%, compared to analysts' consensus estimates of 52c and $12.01B, respectively.

This morning, Piper Jaffray kept an Overweight rating on the stock with a $33 price target. CSCO rose $2.32 or 8.61% in early trading to $29.25 on nearly twice its average daily trading volume. The shares have gained 27% over the past 12 months.

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Feb. 12 Chart of the Day – CPA

Copa Holdings reported fourth quarter adjusted earnings per share of $2.83, while consensus was for $2.03 per share.  Fourth quarter revenue was reported at $670.9 million, vs consensus of $655.2 million.  The Board of Directors of Copa Holdings approved a 2015 dividend of .84 per share per quarter, corresponding to 40% of Copa Holdings' annual consolidated net income for 2014.  Dividends will be distributed quarterly during the months of March, June, September and December.

The stock is currently trading in a pullback on its daily chart, with potential short-term upside to $118.15.  The current closing price at $111.74 makes CPA an attractive short-term opportunity on trade above 113.40.

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