Most traders neglect to look at the big-picture thus only focusing on the daily fluctuations, and the problem with that is, they tend to let their emotions get in the way and not able to forecast the market accurately. I am not saying to forget about the daily fluctuations, but what I am saying is, we have to keep everything accounted for: Minor, intermediate, and macro term to accurately forecast the probability of a direction.
In this article, I want to share three stocks that we are currently watching to engage for our Long-Term Strategy Picks. I want to just share three monthly-charts that could give you ideas of where these stocks might be going looking at the long-term perspective.
First, we must understand that the most basic idea of technical analysis, the idea of “old-resistance becoming new-support”, and when that new-support becomes a “confirmed” support, that’s when the powerful move can commence. Once the primary-term uptrend is established and cultivated, it can very well last for years (I mean YEARS!), and it won’t be easily dismantled without the major topping pattern.
Today, it seems like everyone is complaining about how so many stocks are in “high valuation” or “extended” or “overbought“; however, these stocks I am going to present to you are not in that category and getting ready to move to the upside.
1) MGM Resorts International (MGM)
After the major crash in 2008-2009, MGM bottomed in 2010 and stayed in the “accumulation” phase (aka “Stage 1”) for about 4-years before it started to breakout around 2014. What we have to understand is that the “breakout” itself can be very difficult to predict because we all know that the trend does not establish with straight-up move and there are always traps, so what does stocks do? It pulls back down to the “old resistance” level for a retest. This stock did that mid to late this year and currently bouncing back up.
I can’t say that MGM is ready for a ‘trip to the moon’ right now, but what I can say is, that as long as the buyers can protect that $15-$18 level, the true power move might be in stored in the long-term perspective if we can confirm the bounce on that support.
MGM Monthly Chart 1990 – 2015
2) TEXAS Instruments (TXN)
It looks like TXN has found support in $40ish-level, and finding buyers last few months as the price is now back at the recent highs at $59ish. So unlike the MGM and BRCM, this stock has progressed to the upside and now retesting the previous highs again. We may or may not fall from this level, but I would not engage right now, but rather wait and see how it’s going to deal with this level first.
Long-term outlook is still very much attractive, but in the event that the price falls back down to $40ish-level, we want to see $35-$40 level holding and bouncing back up to keep this move resuming back up.
TXN Monthly Chart 1995 – 2015
3) INTEL Corp (INTC)
This chart is bit more complicated than the other charts I’ve shared on this post as we have two-levels of pivot; first level at $30ish and the second level at $35ish.
Nonetheless, this price-action from 2000 to 2015 is what we call an Accumulation phase after the crash back in 2000. Intel (INTC) is just getting ready for the next phase which is a Public Participation which may occur above $38 – $40 price-level. This, too, have high potential to regain everything it has lost back in 2000, and in 4-5 years, we may even see $75 price-level once again; but first, we must reclaim $40 price-level to the upside.
We will be closely watching this stock to engage for our Long-Term Strategy setup.
INTC Monthly Chart 2000 – 2015
Disclosure: I do not own stocks/options mentioned at the time of this article, but preparing to engage
