Pre-Market Analysis for Tuesday, July 27
Today in the Stock Market
The recent price action in the Dow Jones Industrial Average shows that investors are feeling more confident. However the next few days will be extremely important for the bulls. On Monday, the Dow broke through near-term resistance at 10,500. This area is one of two significant barriers – the main price we are watching is 10,600. This is the price the Dow hit on June 6 before sliding to a low of 9,732 on July 2. A break of 10,600 would be very bullish and we would expect to see investors jump back into the marketplace and create a strong uptrend.
The tech sector was also able to extend its winning streak. QQQQ, the EFT of the NASDAQ Composite ended Monday testing some minor resistance at $46.50. We think the major test will come at $47.50. That was the high made on June 21 before the ETF collapsed to a low of $41.77 on July 1. If momentum continues to build, we should reach this area very quickly.
News that most European Banks passed their stress test is helping to build some investor confidence, which is why gold prices are struggling to make gains in the near-term. Investors had fled into gold to protect their capital but now that the situation is starting to clear up, they are closing their positions and may be ready to jump back into stocks. But gold is a very flexible investment so we are still bullish in the long-term. For now we expect $115 to continue to act as support. A break below that price could lead to a test of minor resistance at $114.50.
Investors should be watching oil prices very carefully in the short-term. USO continues to hold support above $35.00, which is a good sign but momentum appears to be waning and we are entering a period of consolidation. Look for support to hold around $35.00 and resistance at $36.00.
Our week is off to a fairly good start. On July 21 and 22 we alerted our members to a potential trade on the horizon, PCBC. The price has traded in a fairly tight range and last week was testing resistance at $0.75. We alerted our members to watch for a break of that level. Monday morning just after the open we received our trade signal and the stock quickly shot higher. The trend remained strong throughout the day and the stock closed at $0.878, which was extremely close to its session high of $0.885.
On Friday several of our recent picks hit our price targets but there were a few we thought had more potential to rise. AEHI is one stock we thought could move higher and we were proven right. Although the stock hit some selling pressure at the open, the price quickly recovered and broke through short-term resistance at $0.60.
SILA has made some very strong gains in the last few sessions and that momentum could propel it even higher. Volume remains very strong but there are signs that the selling pressure is starting to build. Although SILA closed at its high of $1.16, it struggled throughout the session to reach that price. The stock could reach $1.20 but that will represent a very strong sell point for a lot of investors.
Similar to PCBC, we are closely watching PARD. We were waiting for the price to break $0.61 on strong volume and we received that signal on Monday when it hit a session high of $0.62. PARD ended the day just off its high at $0.61. There is some minor resistance at $0.65/$0.66 but a break of this barrier should lead to some significant gains.
ABK is another stock we like as a long-term trade and it is rewarding us handsomely. We recommended members buy shares when the price was holding support at $0.65. On Monday the price broke through strong resistance at $0.80 and closed at $0.86. The next major barrier for this stock is at $0.90.
CRBC has also been a great financial stock for our members. Earlier in the month it was trading at a low of $0.75. When it did not break that support level, we recommended investors buy stock. From July 8 – 13 the stock hovered around $0.91 and represented a good selling point in the near-term. Not surprisingly, the price fell under some selling pressure and dropped to a low of $0.76, which was another great buy opportunity.
On Friday, CRBC gapped significantly higher and rallied to $0.99. There was more buying on Monday at the open and the stock rallied to a high of $1.02. That is a gain of 34%. CRBC managed to close above support at $0.95 but volume remains fairly low so we would not be surprised if we saw some strong selling today as investors take their profits.
LBSR is not shaping up the way we were expecting. Although the stock has not triggered our stop-loss we think that there are more risks to the downside at this point. On Friday LBSR broke through near-term support at $0.022 but we did not see any follow through buying. We are going to keep our eye on this stock because it still has potential but we need to see volume start to increase. A good stop-loss to have is at $0.018. That would represent a loss of 18%.
Monday’s open for EVSO offered a great exit opportunity for our traders. The stock gapped higher and opened at its resistance point of $0.08. We pointed out that the stock was struggling to make gains and recommended investors look for selling opportunities.
As we have pointed out, timing is everything in the stock market. CBIS was on our watch-list but we removed it on July 12 because there was no follow through buying. However we have kept an eye on it and the recent selling pressure created a good entry point.
On Monday we received a buy signal when CBIS broke above $0.07 on good volume. We are now expecting this stock to test resistance at $0.12. Look for some selling pressure in the morning but as volume picks up the price should start to move higher by the afternoon.
We are adding 2 new stocks to the watch-list this morning. The first is CHTL. Last week this stock was under strong selling pressure but on Friday, we saws signs that buyers were coming back into the marketplace. On Monday there was some follow through buying as it hit a high of $0.378. This would be a good buy area as volume supports another drive higher in the near-term.
We are also jumping on ADLS and hope to capitalize on growing momentum. This stock made some major gains on Monday and although it dropped from its high, it still closed in positive territory at its resistance point of $0.045. During Monday’s session, ADLS hit a high of $0.053 but investors used that as an opportunity to take some profits and yesterday’s closing price represented a second chance for a good entry point. Investors should expect to see a strong open this morning.
LEHMQ has presented us with another opportunity to make some profits. The stock sold off sharply on Friday and closed below our key area of $0.07. However the drop created some buying pressure on Monday as investors regained most of the lost territory. A strong open could help to attract investors and drive this stock past resistance at $0.08.
Have a Great Trading Day!
Your Hyper Growth Stock Team
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