Keith Richards
Portfolio Manager at ValueTrend Wealth Management
Member since: May '09 · 2616 Opinions
Rating Card
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Rating
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Win
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Neutral
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Big Loss
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| 4.64 | 230 29.53% | 181 23.23% | 147 18.87% | 151 19.38% | 70 8.99% | ||
| 1 Month | 4.58 | 23 12.43% | 43 23.24% | 70 37.84% | 47 25.41% | 2 1.08% | |
| 6 Months | 4.66 | 36 20.22% | 50 28.09% | 36 20.22% | 42 23.60% | 14 7.87% | |
| 12 Months | 4.67 | 47 28.83% | 43 26.38% | 19 11.66% | 35 21.47% | 19 11.66% | |
| 2 Years | 4.68 | 59 42.45% | 32 23.02% | 11 7.91% | 18 12.95% | 19 13.67% | |
| 5 Years | 4.6 | 65 57.02% | 13 11.40% | 11 9.65% | 9 7.89% | 16 14.04% |
Stock Opinions by Keith Richards
He's held cash for about 3 months now, as he typically likes to hold cash over the summer. He shuffled a few things around.
Continues to believe that certain tech stocks (Mag 7) are way overvalued. So he's been trying to go into whatever is not in that category -- value stocks, commodities, etc.
He's seeing it flow into a lot of the defensive sectors. This tells us something.
It was all about tech since the April selloff. But as of the middle of August onward, tech has taken a backseat. They had a bit of a bit last week with the speech from the Fed. But $$ is shifting into the defensives -- staples, utilities, industrials, and even healthcare (the dog of the universe for the past few months). He did a video last week that shows relative performance of the sectors.
Not a bad idea to choose from these sectors and avoid tech.
You might just as well ask, "Why did it snow last January?" There are a lot of vacations and golf playing and so forth. Volumes are always low over the summer.
All he does is pay attention to patterns, and half the time he doesn't care about the "why" of stocks behaving the way they do. Whatever the case, as we get into October/November, you'll see that markets start to find a bit of legs. Probably because traders are off their vacations and are back at it.
Yesterday, he took just a little bit of gold out; on a 14% weighting, he sold around 2%. Doesn't own this one right now. If you're a longer-term player, gold has lots of room to go.
Gold looks a bit extended (temporarily). You can see that on the AEM chart; the breakout was around $80, had a good move, and now it's arcing off of the trendline.
Breakouts are good, and they typically last for a while. Based on the recent quick move, you can expect a pullback.
Looking at the 5-year chart, could meet some resistance at the $95 high of early 2022. But there isn't a big wall. Look back from late 2022 to mid-2024, there was a wall of around $70. One point in history is going to cause some resistance, but it's not as bad as multiple tests that can cause significant resistance.
Believes he heard a comment that its forward guidance is uncertain, and that could be the reason it's pulled back. Earnings are one thing, but the street looks for forward guidance because that's what's going to happen next.
Longer-term chart is a good picture. On the 1-year chart you can see consolidation. So long as the neckline (a bit over $180) holds, you're fine to own it. He always buys on a positive test of support. Everyone wants to buy as cheaply as possible, but the problem is that it could get cheaper by far. Don't buy until it proves that level of support by bouncing up.
When it comes to indicators, there's a longer way to look at it rather than just overbought/oversold. This could be a half-hour discussion by itself, so he'd steer the investor to a couple of videos.
He just recorded a video yesterday (being posted to his YouTube channel tonight) on how to prevent falling victim to topping stocks. He also did one a couple of days ago on bottoming stocks.
Kind of an up-and-down stock over its history. Resistance about a year ago, and looks to be attempting to bounce off that. Now you have to look for the next level of overhead resistance, which may be ~$195. Moves right now show it's very probably a near-term trade. How high and how long remains to be seen.
The 3-year chart has a bouncy look to it, perfect for swing trading. Short-term picture looks as though the stock will pop a bit, but the longer-term picture implies that it's on its way down toward either the middle or the lower part of the trading band.
Look at the 5-year chart for the big picture. Has support ~$300. Recently bounced, and then failed (failure of support). So we have ourselves a breakdown, the opposite of a breakout. Will probably bounce in the near term.
But there's this monstrous wall, let's call it $270, and the stock will probably fail before that point. At the points of support and resistance, people bought there and they remember what they paid. They just took a shellacking and they want out. And that's why you'll see selling pressure.
Though he's not a fundamental analyst, he can offer a small insight into the credit industry. There's been a lot of talk that's there's probably going to be some reason for the Fed to ease, and that's because the economy is probably slowing down. Purchases will be down, so Visa and the like will suffer.
That's probably why it's stopped moving up to the same degree as the S&P 500. Looking at the chart, you can see the consolidation pattern; as long as the pattern doesn't break, you're OK. Don't assume anything. If it breaks to the upside, you want to be a longer-term owner. But it could also break to the downside, possibly for the fundamental reason mentioned above. So you need to be cautious on this one. The consolidation could be a warning sign.
(Note the short timeframe.) He even bought a bit more. Hasn't broken key support levels; so as long as it doesn't, he's OK. Nat gas demand for AI is huge. There's also cloud computing, population growth, and general energy usage. Lots of reasons that nat gas has a future, but near term it's subject to trading swings.
Check out his blog for the story on natural gas, and ARX is part of that story.
(Note the short timeframe.) Summers are historically slow; particularly August, September, and October. People get seasonality wrong; it's just a tendency. Say you drive on the 401 in Toronto at 4 pm, the tendency is a big pile of traffic. At 4 am, the tendency is for way less traffic. But it doesn't mean there won't be a pileup at 4 am, or smooth sailing at 4 pm.
Over those months, the VIX tends to be a bit higher. Though it hasn't been this August. But doesn't mean it won't be in the next couple of months. So he likes to be a bit more defensive at this time, buying more defensive stocks and holding a bit of cash.
Slogan for good stock candidates: "The longer the base, the better the case." This chart had a big base for several years. Then it broke out, and look what happened. You can see this over and over again in stocks.
Moved into an uptrend, arced off aggressively. Now pulling back from being overbought, will likely retrace to somewhere near the trendline which is probably somewhere near the 200-day MA (don't expect it to hit exactly). Not a disaster at all. On the chart from Feb-April of this year, those previous buyers may sell if it breaks that level of ~$51-52. Keep an eye on that.
