The Power of Moving Averages

I mentioned in yesterday post about GDXJ. The point of this blog is to focus on CEFL but other charts can give me teaching moment. The chart below shows the power of a downward sloping 50 dma. It is powerful…price hit it and reversed. Notice that this is the 4th time this has happened. My rule of thumb is each time that 50 ma gets a little weaker and at some point it will break through. What I hope to see today is low volume on this pull back and it doesn’t fall below the low of yesterday. As long as that doesn’t happen this trade is still in play. But again, this is a breakout to upside in a solid downtrend so lets not get to excited just yet.

jnug1230

Break Out in a Down Trend

Ok…this isn’t CEFL but I want to use it for a teaching tool. In my other accounts I trade JNUG. It has been in a SOLID down trend…Notice on the chart below the breakout reversal didn’t happen till the RSI was below 30 in the extreme oversold. I don’t use RSI for trade signals but it is part of the soup so to say. This down trend is strong…notice there have been 4 failed attempts to break out above the 20 ma. So the next few days will be important, but TSI, MACD and price itself all flashing buy signal and possible trend change. But with the downtrend having been so strong we can’t get to excited. I need to see price hold the 20 ma for a few days and the 5 ema to cross and close above the 20 ma. As of the posting of this chart price has broken above previous resistance…so it should hold as support now. If so…the 200 ma would be first logical target. All of this analysis is explained in my FREE book, The Money Flow.

jnug1229

Yawn……zzzzz……

Talk about boring!…..

This is the reason holidays stink!

If your like me and LOVE watching stocks go up and down…holidays stink! Does that make me a bad person?….maybe…..anyway….another day another $60 profit. I locked in $480 in profit in form of coupon payment for the month of December. That is money in my pocket. Not to shabby if I say so myself.

I am up $540 in price appreciation since adding the full 2000 share position in late November. If that isn’t EASY income I’m not sure what is….your job can’t be that easy? or is it? if so please let me in on it…my next target is $17 and then I will buy the beers…or new car…or maybe trip to Vegas…

cefl1228

Notice ATR is turning down….classic consolidation pattern….If you haven’t looked over Free copy of The Money Flow do it NOW!!!

Tight Box

So for the last 2 weeks we have been in a tight box….makes sense with the Dow hovering near 20,000. The market doesn’t usually take this long to decide to sell off. That usually happens very quickly. Stairs up elevator down…

All the indicators are starting to flat line….again that makes sense with price staying in a $.30 cent box for the last 2 weeks of trading. If the dow breaks 20,000 we should see CEFL break out of the box to the upside and move to my $17.00 target.

cefl1222

Notice the moving averages. They are properly aligned now. 5,20, 50,200. Support is around $16.10 Resistance is around $16.75. RSI has plenty of room here.

 

Easy Does it!

Today marks the 8th trading day price has printed above the 50 moving avg. This is very important if we are to see a sustained move higher. The 20 moving avg is pennies away from crossing the 50 ma and creating a proper alignment of the moving averages, 5,20 and 50 in order. If you look to the left hand side of the chart below, you will see the huge move up that happened after the proper alignment of 5,20 and 50. No clue if that will happen again, but it needs to happen to have such a move. We have serious overhead resistance in the $17.00 to $17.30 range. $17.00 is my new target. (see the double blue lines)

TSI and MACD have made higher highs but price hasn’t. (See blue circles and line) That is divergence. Price and the indicator are printing different. This tends to resolves by price breaking to the up side. The price in relation to the moving averages are pointing to the same move. Fingers Crossed. Next Friday is coupon payment date ($485)…that is why I call my blog easyincomereport.com….it gets no easier then the $485 (not to mention the $480 unrealized gain).

My long term goal is $2000 in easy monthly income from this trading system. That would be 9,000 or so shares. Think big!

cefl1217

Crazy Day Yesterday!

Yesterday was little wild. Gold slaughtered. Some of the high yielder like utilities and telecom were beat up but have recovered nicely today. But for my purpose here, CEFL held up much better then I expected. Seems bullish to me. The moving averages are still moving in our bullish direction. 5 still above the 20 and the 20 ma is very close to closing the 50 ma. Price is printing below the 5 ma (not good) but bounced off the 20 and 50 ma today. Assuming that holds, that is a bullish sign. I am long 2000 shares at $16.00.  I qualified for $.24 x 2000 coupon payment on the 9th…$480 should be paid on 22nd of Dec. I am up $480 on the 2nd lot of 1,000 shares. So far so good….new target is $16.90 for 1/4 of the position.

cefl1215