Stocks continue to shows signs of strength as they climb a “wall of worry” through the early summer months. This means that the traders have a window of opportunity to take advantage of bullish opportunities, at least for now.
According to the charts, Newmont Mining Corp (NEM), E I Du Pont De Nemours And Co (DD) and Host Hotels and Resorts Inc (HST) are among those providing technical signs they’re ready to move higher.
Newmont Mining Corp (NEM)
Gold prices continue to surge as longer-term investors see the dollar remaining weak and unease in the global economies as bullish catalysts for the yellow metal, and they’re right. Newmont mining continues to benefit from this trend, as its price is now cresting above a significant chart level.
The $40 mark for Newmont represents a round number that has in the past acted as both support and resistance for the stock. Most don’t consider round numbers as technical indicators, but historical studies show that stocks and indices tend to surge or sell off based on round numbers, as investors see these prices as psychologically important.
The $40 level for Newmont is also a few dollars higher than the 37.7% Fibonacci retracement level from the 2011 highs to the 2016 lows. Traders should monitor the $40 closely for the next move.
E I Du Pont De Nemours And Co (DD)
Basic material companies continue to see buying activity as signs that the economy may not be contracting as quickly as originally thought. Du Pont has seen the benefit of this demand as shares have broken back into a long-term bullish trend by moving back above their 20-month trendline.
DD’s short-term technical are giving it a boost with a recent bounce from its 200-day moving average a few weeks ago and now a cross back above its 50-day trendline.
We saw activity like this in 2014 as Du Pont formed a long-term bullish trend that took the stock from $63 to $76 over a six month period … results we expect to potentially see repeated.
Host Hotels and Resorts Inc (HST)
Tis the season for hotel companies and other travel-related companies to surge as we take to the highways. Host Hotels and Resorts is a seasonal favorite because of the fundamental aspect, but the recent technical activity should have traders checking the shares out as a bullish trade.
HST shares recently built a strong foundation of technical support at $16 as three of the moving averages that traders watch are not only forming a confluence of support, but are also beginning to trend higher with the stock.
We refer to situations like this as “triple-barrel support” as there are now three key trendlines sitting at $16, meaning that the stock is likely to see strong buying if it hits this price. At the same time, shares are pushing towards the $17 level, which has been resistance.
A break above $17 will signal the bulls are in charge of this stock and ready to run.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
