Today, for fun, let’s review the charts. Let’s start with a stock we don’t regularly follow here: Amazon. The one month chart is interesting.
Interesting in that on Friday, at 10:30 in the morning, AMZN was trading at $3,399.66, but couldn’t quite make it to the psychologically interesting but otherwise unimportant level of $3,400. At 2 minutes before the close it was down to $3,281, and then in the last two minutes of trading it collapsed, closing the day at $3,272.71, a drop from peak to bottom of 3.7%.
What’s up (or down) with that?
How can a stock with a $1.69 Trillion market cap collapse in the final moments of trading?
Did the company’s fortunes change that dramatically in 120 seconds?
No. It just proves that there are no markets, just interventions and manipulations. Obviously someone decided that, on options expiration Friday, that they wanted to push Amazon to a certain level to put their put options in the money, or take their call options out of the money, or whatever.
This breaks a one month uptrend line, so we’ll see on Monday if this is serious damage, or just a blip.
I’m guessing it’s a blip, because the 1 year chart is still in an obvious uptrend:
In other news, gold appears to be in a consolidation phase. Here’s NUGT – Direxion Daily Gold Miners Bull 2x Shares NYSE + BATS over the last six months:
Since the peak in August, gold mining shares are in an obvious down channel. Was the bottom in the third week of September? Do we turn up from here?
Probably, but NUGT will need to get back over $100 for us to know for sure.
One more chart, this one of EQX.TO – Equinox Gold Corp. which, as you know, is my favorite gold stock.
Click on the chart to see a larger version; my thoughts:
The obvious up channel from the bottom in March/April ended in August. We are now in a consolidation phase, bounded by the horizontal lines at $14.55 and $17.97. Which way will it break? I’m guessing to the upside, because gold is traditionally stronger after October.
Equinox will release their third quarter financial results before the market opens on Monday November 9. The price of gold in the third quarter increased from around $1,762 per ounce to $1,878, and increase of 6.5%. Did costs increase by 6.5%? No, so that increase goes straight to profit. In Q2 Equinox produced and sold around 125,000 ounces of gold. A 6.5% increase in the gold price, if they pour the same number of ounces, is an extra $14.5 Million in revenue; given that the company lost money after expenses, that’s a big help to the bottom line.
Q2 was also impacted by COVID shut downs; Q3 should be better.
If the price of gold continues to increase, and the earnings are good, Equinox easily breaks through the $18 level, and is probably a $22 stock by the spring.
Probably.
How will Trump’s re-election change things? I don’t know, but I assume, at least in the short term, that it will increase volatility, and that’s probably good for gold.
We shall see. More next week.
Amazon, Gold, and the Charts
by JDH on October 17, 2020
Today, for fun, let’s review the charts. Let’s start with a stock we don’t regularly follow here: Amazon. The one month chart is interesting.
Interesting in that on Friday, at 10:30 in the morning, AMZN was trading at $3,399.66, but couldn’t quite make it to the psychologically interesting but otherwise unimportant level of $3,400. At 2 minutes before the close it was down to $3,281, and then in the last two minutes of trading it collapsed, closing the day at $3,272.71, a drop from peak to bottom of 3.7%.
What’s up (or down) with that?
How can a stock with a $1.69 Trillion market cap collapse in the final moments of trading?
Did the company’s fortunes change that dramatically in 120 seconds?
No. It just proves that there are no markets, just interventions and manipulations. Obviously someone decided that, on options expiration Friday, that they wanted to push Amazon to a certain level to put their put options in the money, or take their call options out of the money, or whatever.
This breaks a one month uptrend line, so we’ll see on Monday if this is serious damage, or just a blip.
I’m guessing it’s a blip, because the 1 year chart is still in an obvious uptrend:
In other news, gold appears to be in a consolidation phase. Here’s NUGT – Direxion Daily Gold Miners Bull 2x Shares NYSE + BATS over the last six months:
Since the peak in August, gold mining shares are in an obvious down channel. Was the bottom in the third week of September? Do we turn up from here?
Probably, but NUGT will need to get back over $100 for us to know for sure.
One more chart, this one of EQX.TO – Equinox Gold Corp. which, as you know, is my favorite gold stock.
Click on the chart to see a larger version; my thoughts:
The obvious up channel from the bottom in March/April ended in August. We are now in a consolidation phase, bounded by the horizontal lines at $14.55 and $17.97. Which way will it break? I’m guessing to the upside, because gold is traditionally stronger after October.
Equinox will release their third quarter financial results before the market opens on Monday November 9. The price of gold in the third quarter increased from around $1,762 per ounce to $1,878, and increase of 6.5%. Did costs increase by 6.5%? No, so that increase goes straight to profit. In Q2 Equinox produced and sold around 125,000 ounces of gold. A 6.5% increase in the gold price, if they pour the same number of ounces, is an extra $14.5 Million in revenue; given that the company lost money after expenses, that’s a big help to the bottom line.
Q2 was also impacted by COVID shut downs; Q3 should be better.
If the price of gold continues to increase, and the earnings are good, Equinox easily breaks through the $18 level, and is probably a $22 stock by the spring.
Probably.
How will Trump’s re-election change things? I don’t know, but I assume, at least in the short term, that it will increase volatility, and that’s probably good for gold.
We shall see. More next week.