VP & Portfolio Manager, Chief Investment Officer at Castlemoore Inc.
Member since: Nov '06 · 1353 Opinions
In technical analysis, there's a pattern called the double top. A chart will hit a top, pull back, and then hit another top. People are deciding whether or not they're going to buy.
People are going to be looking at earnings, rather than at geopolitical and trade events. Not known yet how those events will affect the economy. Second quarter results will be coming out in the next few weeks to a month. Those will drive markets one way or the other. If you have cash to deploy into the market, he'd wait to see if we break that 6050 or so level on the S&P.
Technical analysts don't predict. They look at the patterns and trade them. He has about 15% cash in his diversified NA portfolio. If markets maintain or break above the resistance level, he'll invest. If markets decline, he'll raise more cash.
Lots of pessimism. Beyond the markets, people are pessimistic because of what's going on in the US. People are thinking about how they don't want to go south of the border for travel. Investors are surprised to learn that their portfolios are more or less where they were at the beginning of the year. They're aware of the decline, but not of the rally.
It's interesting to see how market's have recovered. He's a bit surprised to see that last month was a very strong month, driven mainly by a lot of the tech names we see at the top of the S&P 500.
Markets have done well, but a big decision point coming. We're now at a big resistance point. If we can break above that, we should continue on for the rest of the year.
Average rate of return of 20% since it went public. Does take pauses, and it looks to be taking one right now. The drop looks a bit concerning, though still in a normal trading range. If it can hold above the $330 level, it's worthy of buying on this dip. Something bad happened yesterday to cause the almost 5% drop.
But you have to be very careful. You need a trading plan, which means that if it drops below $330, you sell. Solid support at $315.
Price today is back where it was in 2019, with a very broad sideways motion and trading range since then. The move from $116 to $76 this year was a huge drop, it really fell apart. Has recovered a bit, but volume is drying up. On any rally, you want to see some good volume. Resistance around $100, so if it breaks above that then it's in a new upward trend. Look elsewhere for now.
Still in a downward trend, but getting very close to the top of that downward trend. Breaking out right now, and if that continues it looks like a good buy. Lots of support around $12.60; if it can hold above that, worth holding on to. Will probably run its course around $14, where there's very strong resistance. Yield is 8%.
Long term (going back 20-25 years) has done very well. With the dividend, averages 8-10% annual return. All-time record highs back in April. These things do take pauses, especially after making new highs. At a very good support level. Looks good for a short-term trade to upside of ~$300, and then see where it goes.
Try a half position today, and then put more in if the stock moves up beyond $300.
Don't hold on if it drops below $270. That would mean something's gone wrong and it's lost momentum. You don't need to sell out immediately, but start reducing to reduce your risk.
Past high back in 2022 was around $108. In the doghouse until May of this year. One of his biggest positions. He's riding the wave. Could break above $100 very easily, and $108 isn't out of the question. Momentum is peaking right now, but he's seeing a drop in volume (which indicates sideways motion or pullback). Be cautious, it's overextended.
If it dropped back to $90, he'd definitely consider exiting.
Takes 15 stocks, splits them into preferred and common, and here you're left with the common shares. The preferred shares get guaranteed dividends, and the common shares get everything else. Coming to more of a historical long-term level, which is stable. People buy this for the dividend, not for capital gains.
Overall, looks like a stable investment. He wouldn't worry about the dividend. He can't recommend a buy on it yet, as he'd have to do some more research to fully understand it as well as the dip in the chart.