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US Stocks Just Passed An Important Test. Here’s The Next Hurdle To Watch.

The following is an excerpt from our May 29th Keys To This Week report on the US stock market (access requires subscription).  These reports, sent to subscribers on Monday mornings, list the 10 key market metrics to watch for that particular week, what they are saying about upcoming market direction, and the investment opportunities — or dangers to your portfolio — they suggest.


Keys To This Week, May 29th 2018:
The US Stock Market

Conclusion, Investment Implications, Strategy

First and foremost, the benchmark S&P 500’s (SPX) minor and major trends remain positive (bullish) heading into this week amid indications that the market’s larger 2016 advance is resuming

Our current cautiously positive overall market bias will remain intact this week above minor underlying support near SPX 2675.  However, it would take a sustained rise above SPX 2743, amid narrowing corporate bond spreads and improving volume, to help confirm the market is making a sustainable resumption of its larger 2016 advance.

continued>>>


Here is the chart that accompanied that analysis/observation, one of nine that were included in the entire report.

May 29th Keys To This Week: Chart 4 of 9

In this case, we identified a potential buy area in the S&P 500 at 2675 (actually at 2678 to 2674, per the chart), a place where the market needed to hold to maintain a bullish bias or risk going into a  much deeper decline.  SPX traded as low as 2677 that day right before rising by 4.3% over the next 10 trading sessions.

The market has been extremely volatile this year, with no real direction, and the flow of news and data can be overwhelming.  What should you be paying attention to?

We add unique value by letting subscribers know when to be paying attention — and to whatright when the market is at important inflection points where professional traders have to make tactical decisions in their portfolios.  Identifying these turning points, ahead of time, allows investors to manage their risk better — specifically, putting new money to work, or mitigating risk, at the right spots.

Looking ahead, the next key level to watch above the market is 2800 in the S&P 500.  We will be carefully watching our 6 key market metrics to determine the internal, “under the hood” health of the market as this level is being tested.  A sustained rise above it should clear the way for even better gains in the upcoming months.  Stay tuned.

 

Asbury Research subscribers can view our latest research on the US stock market, market sectors and industry groups, interest rates, ETFs and commodities — plus our current picks in individual US stocks and ETFs — by logging into the Research Center via the big gold button in the upper right corner of the screen.

Subscribers and interested investors can view our recent closed out trade ideas by Clicking Here.

To non-subscribers:  Request more information about us, including service and pricing options, by visiting our Contact Us page or by calling 888-960-0005.

Asbury Investment Management (AIM): Our Latest Video

Click Here for a video that explains how we used our latest research to better manage client portfolios.

For further information about Asbury Research Management,
please email or call 1-844-4-ASBURY (1-844-427 2879).


10-Year Notes’ Collapse Back Below 3.00%: What It Means For The Market

In our previous May 19th Research Excerpt, entitled Long Term Interest Rates At Major Decision Point, we provided an excerpt from our May 16th Keys To This Week report (access requires subscription) which pointed out that the yield of the benchmark 10-Year Treasury Note was testing a major inflection point at 3.13%

Knowing where these key levels are, ahead of time, is the next best thing to knowing how the market is going to react to them.

From that May 16th report:

Our primary focus this week is on the market’s reaction to major yield resistance in the 10-Year Treasury Note at 3.08% to 3.13%, which is currently being tested.The next significant move in these benchmark yields, either up to the 3.34% to 3.68% area, or back down towards 3.00%, perhaps to the 2.88% to 2.77% area, is likely to begin from this major inflection point.  More intermediate term metrics favor a decline back toward 3.00% or lower.

The pink highlights in the newly-updated chart below show that 10-Year yields actually peaked at 3.11% on May 17th before collapsing all the way back to 2.77% by May 29th, which is an atypically sharp decline of 34 basis points in just 8 business days.

US 10-Year Treasury Yields daily since 2015

The next level of underlying yield support is major support at 2.62% to 2.47%.  This major support area must contain US 10-Year yields on the downside for the current major trend of rising long term US interest rates to remain valid and intact.  A trend of rising interest rates is generally characteristic of a thriving, growing economy, while declining interest rates suggest an economy that is struggling. 

Why is being aware of these key interest rate levels so important?  Because the yield of the 10-Year Treasury Note is the benchmark for long term interest rates in the US, and is also used as the common denominator for various credit spreads that include mortgage-backed, corporates, and agencies, all which are used to set the pricing/risk for various interest rate-related products.

Disclaimer: This report is provided for information purposes only. Past performance may not necessarily indicate future results. No inferences may be made and no guarantees of profitability are being stated by Asbury Research LLC.  The risk of loss trading in financial assets can be substantial.  Therefore, you should therefore carefully consider whether such trading is suitable for you in light of your financial condition.

Asbury Research subscribers can view our latest research on US interest rates, as well as the US stock market, market sectors, ETFs and commodities — plus a table with our current picks in individual US stocks and ETFs — by logging into the Research Center via the big gold button in the upper right corner of the screen.

Subscribers and interested investors can view our recent closed out trade ideas by Clicking Here.

To non-subscribers:  Request more information about us, including service and pricing options, by visiting our Contact Us page or by calling 888-960-0005.

Asbury Investment Management (AIM): Our Latest Video

In addition to publishing periodic Research Excerpts from Asbury Research, every several weeks we also produce a video that takes an up-to-date look the markets from an asset management standpoint, and shows how Asbury Investment Management is actually managing client assets using  Asbury Research ideas.

Click Here To Watch Our Latest Video

For further information about Asbury Research Management, please email or call 1-844-4-ASBURY (1-844-427 2879).

 


Long Term Interest Rates At Major Decision Point

For the past month, the day-to-day movement in the stock market has been squarely focused on US interest rates as the yield of the benchmark 10-Year Treasury Note has recently made a sustained move back above 3.00% — for the first time since mid 2011.  These yields closed at 3.11% yesterday, May 17th.   Rising long term interest rates amid a tightening Federal Reserve, although indicative that the Fed has confidence in the sustainability of recent economic growth, can eventually become a drag on equity prices as the cost of borrowing  increases.

The charts and text below are an excerpt from our May 16th Keys To This Week report (access requires subscription) for US interest rates and Treasuries, showing Keys #3 and #4 of 10 — which we provide to subscribers every week.  (Separate Keys To This Week reports are produced for the US stock market, US market sectors and industry groups, and economically-influential commodity prices like crude oil, copper, and gold.) 

The charts show that long term US interest are currently at a major inflection point, from which the recent rise in rates can either accelerate further  — putting downside pressure on US stocks — or begin a significant reversal that can potentially push 10-Year yields back below 3.00%.

 

excerpted from

Keys To This Week, May 16th 2018: US Interest Rates & Treasuries

Support/Resistance & Trend: The Yield of the US 10-Year Treasury Note. MAJOR DECISION POINT.  The red highlights in Chart 3 below show that the yield of the benchmark 10-Year Treasury Note is currently testing major, long term resistance at 3.04% to 3.13%, which represents the December 2013 benchmark high and June 2003 benchmark low.  Major levels in yield like this one are typically not significantly and sustainably broken without at least a several week corrective decline first.

Chart 3 of 6

Support/Resistance & Trend: CBOE 10 Year Treasury Note Yield Index (TNX). MAJOR DECISION POINT. The red highlights in Chart 4 below show that TNX, which is based on 10 times the yield-to-maturity on the most recently auctioned 10-year Treasury note, is also testing major, long term resistance, at 30.83 to 31.00, which represents the June 2003 benchmark low and February 2000 major downtrend line.  This equates to a 3.08% to 3.10% cash 10-Year Treasury yield.  Again, major levels in yield like this one are typically not significantly and sustainably broken without at least a several week corrective decline first.

Chart 4 of 6

Market expectations for more Fed rate hikes, according to the CME Federal Fund futures contract, are currently pricing in a 95% chance of another 25 bps hike to 175-200 bps at the June 13th Federal Open Market Committee Meeting.  This has helped keep steady upward pressure on long term US interest rates. 

A sustained rise above 3.13% in US 10-Year yields would indicate an emerging secular trend change, toward higher long term interest rates, and would clear the way for a potentially quick move to the 3.34% to 3.68% area, leading to an eventual move to 4.00% later in the year.  This would be expected to have an adverse effect on the US stock market. 

Conversely, if 3.13% holds as yields begin moving back down, this should help to fuel a stock market rally to new all-time highs.


Asbury Research subscribers can view our latest research on the US stock market, market sectors, US interest rates, ETFs and commodities, as well as a table with our current picks in US stocks, ETFs, and global indexes, by logging into the Research Center via the big gold button in the upper right corner of the screen.

Subscribers and interested investors can view our most recent closed out trade ideas by Clicking Here.

To non-subscribers:  Request more information about us, including service and pricing options, by visiting our Contact Us page or by calling 888-960-0005.

Interest in asset management?  Click Here to learn more about our sister company, Asbury Investment Management.

This report is provided for information purposes only. Past performance may not necessarily indicate future results. No inferences may be made and no guarantees of profitability are being stated by Asbury Research LLC.  The risk of loss trading in financial assets can be substantial.  Therefore, you should therefore carefully consider whether such trading is suitable for you in light of your financial condition.


Upside Target Met In SPDR Health Care Equipment ETF (XHE)

The chart below shows that the SPDR Health Care Equipment ETF (XHE) met our 75.50 per share upside target yesterday, May 17th, which was first displayed and discussed in our March 12 Keys To This Week report (access requires subscription), to capture a $4.12 per share, 6% price advance in just a little over 2 months.

XHE also outperformed the S&P 500 (SPX) by 7.1% during the same period.

Here is the chart.

XHE daily: August 2017 through May 17th

 

We publish these notifications for 3 reasons:

  1. to let Asbury Research subscribers know when to consider taking profits on existing positions,
  2. to let non-subscribers track what we are doing in the market, in real time, and
  3. to make everyone aware of a potential upcoming price reversal as price advances often end as upside targets are met and more savvy investors take profits.

 

Asbury Research subscribers can view our latest research on the US stock market, market sectors, US interest rates, ETFs and commodities, as well as a table with our current picks in US stocks, ETFs, and global indexes, by logging into the Research Center via the big gold button in the upper right corner of the screen.

Subscribers and interested investors can view our most recent closed out trade ideas by Clicking Here.

To non-subscribers:  Request more information about us, including service and pricing options, by visiting our Contact Us page or by calling 888-960-0005.


The SOX Leading Higher & New AIM Video

In our previous Research Excerpt, entitled Semiconductors: A Key To The Market’s Next Move, we published an excerpt and accompanying chart from our Monday April 30th Keys To This Week report (access requires subscription).

Here it is again:

Support/Resistance & Trend: PHLX Semiconductor (SOX) Index.
MAJOR DECISION POINT. 

The orange highlights in Chart 5 below show that the market-leading SOX Index begins this week just above major overhead resistance at 1362, its 200-day moving average which was tested and held last week.  In addition, the green highlights show that more important support exists just below it at 1211, which represents the December and February lows.  How the SOX resolves this major support area is likely to indicate, if not lead, the US broad market’s next significant directional move.

PHLX Semiconductor Index, August 2017 to Apr 27th

We chose this particular chart for this week’s Research Excerpt because of semiconductors’ tendency to lead the US broad market both higher and lower.

The next chart is a newly updated version of that chart.  It shows that the SOX has since rebounded by 71.00 points or 6%, and is once again challenging its 1362 top-of-the-tech-bubble high — actually for the fifth time since Thanksgiving.

PHLX Semiconductor Index, August 2017 to May 9th

During the same short period, the benchmark S&P 500 — which typically follows the SOX — has risen by 43.00 points or 2%.

We would view a sustained rise above SOX 1362 as evidence that the SOX is establishing a new, higher long term trading range, which we would expect to have a similarly positive influence over the US broad market.

We note that the current sideways, volatile, coiling market activity since late January indicates investor indecision — and typically becomes the springboard for the market’s next sustained trending phase, either up or down.

Asbury Research subscribers can view our latest research on the US stock market, market sectors, US interest rates, ETFs and commodities, the current status of our Correction Protection Model (CPM), and our current picks in US stocks, ETFs, and global indexes, by logging into the Research Center via the big gold button in the upper right corner of the screen.

To non-subscribers:  Request more information about us, including service and pricing options, by visiting our Contact Us page or by calling 888-960-0005.


New Asbury Investment Management (AIM) Video

 

Back in late February we announced the launching of Asbury Investment Management (AIM).

 

Click Here to view our latest AIM Video, produced on May 9th. 

It shows how we actually managed client accounts during this recent period of high volatility, non-directional market activity.  Asbury Research ideas, professionally managed.

Click Here to get on our contact list, which will include you in our periodic emails to announce a new video, to update our performance, or to advise of other Asbury Investment Management-related news.

You can also call 1-844-4 ASBURY (1-844-427-2879) for further information.


Semiconductors: A Key To The Market’s Next Move

The following is an excerpt and an accompanying chart from our Monday April 30th Keys To This Week report.  Keys To This Week is one of a number of different investment research reports we produce for subscribers.

 

Support/Resistance & Trend: PHLX Semiconductor (SOX) Index.
MAJOR DECISION POINT. 

The orange highlights in Chart 5 below show that the market-leading SOX Index begins this week just above major overhead resistance at 1362, its 200-day moving average which was tested and held last week.  In addition, the green highlights show that more important support exists just below it at 1211, which represents the December and February lows.  How the SOX resolves this major support area is likely to indicate, if not lead, the US broad market’s next significant directional move.

PHLX Semiconductor Index, daily since August 2017

We chose this particular chart for this week’s Research Excerpt because of semiconductors’ tendency to lead the US broad market both higher and lower.

If this major support area in the SOX holds and the index can rally from it, then it is likely to lead the resumption of the larger 2016 advance in the broader US stock market as represented by the S&P 500 (SPX).  If this support in the SOX is broken, however, we will expect it to coincide with, if not lead, a deeper US broad market correction.

 

Asbury Research subscribers can view our latest research on the US stock market, market sectors, US interest rates, ETFs and commodities, the current status of our Correction Protection Model (CPM), and our current picks in US stocks, ETFs, and global indexes, by logging into the Research Center via the big gold button in the upper right corner of the screen.

To non-subscribers:  Request more information about us, including service and pricing options, by visiting our Contact Us page or by calling 888-960-0005.


New Asbury Investment Management (AIM) Videos

 

Back in late February we announced the launching of Asbury Investment Management (AIM).

 

Since then we have posted two videos:

  • The first one explains our investment process of taking Asbury Research ideas and professionally managing them for client accounts.
    Click Here To View It.
  • The second one displays and discusses how we actually managed those Asbury Research ideas for client accounts during 1st Quarter 2018.
    Click Here To View It.

We will be updating the second, performance-related video every month. 

Click Here to get on our contact list, which will include you in our periodic emails to announce a new video, to update our performance, or to advise of other Asbury Investment Management-related news.

You can also call 1-844-4 ASBURY (1-844-427-2879) for further information.


US Stocks: Buy Now Or Play Defense?

The chart and text below is an excerpt from our April 2018 Global Seasonal Analysis report, a monthly report that displays and analyzes annual, quarterly and monthly seasonal trends for 17 global asset prices including equities, benchmark interest rates, foreign exchange, and key commodity prices based on historical data going back to the 1950s.

Historical seasonality is just one of dozens of metrics that we use to forecast financial market direction.


S&P 500 Quarterly Seasonal Pattern For Q2 Since 1957

The next chart breaks the seasonal pattern in the S&P 500 down further, into a quarterly time frame via 13 weekly increments, and highlights the month of April in green. 

Chart 5 of 23

The chart shows that the third week of April, which is the week of April 16th this year,  is the seasonally strongest of the entire 1st Quarter.  The chart also shows that the final two weeks of June, the weeks of June 18th and 25th, are the two seasonally weakest of the 2nd Quarter.

continued here for subscribers >>>


Asbury Research subscribers can view our latest research on the US stock market, market sectors, US interest rates, ETFs and commodities, as well as a table with our current picks in US stocks, ETFs, and global indexes, by logging into the Research Center via the big gold button in the upper right corner of the screen.

Subscribers and interested investors can view our most recent closed out trade ideas by Clicking Here.

To non-subscribers:  Request more information about us, including service and pricing options, by visiting our Contact Us page or by calling 888-960-0005.


The US Stock Market: 5 Keys To April Direction

The report below, The Weekly Wrap-Up from Thursday, March 29th, is one of a number of premium reports we provide for our subscribers.  It is a good example of how we help investors navigate the markets. and manage their investments, during pivotal — and potentially dangerous — periods in the market.

Keys To This Week / Weekly Wrap Up

The Weekly Wrap-Up: March 29th, 2018

Posted on: Thursday, March 29th, 2018

Correction Protection Model (CPM)Neutral as of March 22nd (from Positive on February 26th)

Our quantitative model for the US stock market, which uses the S&P 500 (SPX) as a proxy, shifted to Neutral (“risk off”) as of the open on March 22nd from Positive (“risk on”) on February 26th.

Click Here for Asbury’s current stock and ETF ideas.

Conclusion, Investment Implications, Strategy

Despite today’s impressive rally going into a long holiday weekend, virtually all of our key secondary indicators that measure the stock market’s internal strength are still negative.  It would take a sustained rise next week above S&P 500 (SPX) 2730 to 2770, which is currently 3% to 5% above the market, and/or vastly improved market internals, to confirm that the US stock market is “out of the woods” and has resumed its larger 2016 advance.

From Last Week’s Research

“The market has rallied aggressively so far this morning, which is not surprising as investors rush in to “buy the dip” off of the 200-day MA in both SPX and the Dow Industrials (DJIA).  However, most of our key near term market metrics are negative heading into this week.  As long as ETF asset flows continue to decline, the SPDR S&P 500 ETF (SPY) continues to underperform the SPDR Barclays Capital High Yield Bond ETF (JNK), corporate bond spreads continue to widen, and SPX remains below 2678 to 2780 to keep the 1 month rate of change negative per Key 2, we will view this morning’s rally as a minor bounce within an uncompleted decline.”

Keys To This Week
Asbury Research
March 19th, 2018

Weekly Summary / Overview

With less than an hour left in this holiday shortened week, the benchmark S&P 500 (SPX) is up more than 50 points for the session following a week-long test of its 200-day moving average, a widely-watched major trend proxy.  If this rally holds through the close, it will indicate some impressive bullish investor conviction, especially going into a long weekend while geopolitical risks abound.  However, despite today’s rally, virtually all of our near term secondary indicators — which measure the internal strength of the market — are still negative and would need to also strengthen next week to confirm the sustainability of today’s advance.

Know Your Levels Next Week

Chart 1 below plots the benchmark S&P 500 daily since August 2017 and highlights the key price levels both above and below the market.  First and foremost, the chart shows that SPX has been testing its (orange) 200-day moving average, a widely-watched major trend proxy currently situated at 2589,  since March 23rd,  This is major decision point for the US broad market from which its next significant directional move, either higher or lower, is likely to begin.

Chart 1

Should the 200-day MA hold as support, minor overhead resistance exists 4% above it at 2691, which represents the March 13th low. Above that, major overhead resistance exists 5% to 7% above the 200-day MA at 2730 to 2770, which represents the 50-day moving average (blue, minor trend proxy) and January 26th downtrend line (red).  A sustained rise above 2770 would be necessary to confirm that the larger bullish trend has resumed and would target an additional 10% rise to 2050.

Should support at the 200-day moving average be broken, however, it would suggest that a deeper decline is coming.  The next two underlying support levels exist 2% below the 200-day MA at 2544 to 2533, and 4% below it at 2491 to 2488 (green).

Near Term Market Momentum Remains Negative

The red highlights in Chart 2 below show that the S&P 500’s 1-month (our tactical time frame) rate-of-change (MROC) turned negative (bearish) on March 19th and will remain so next week below 2678 to 2728, which is 1% to 3% above the market  — and closely corresponds to overhead resistance levels at 2691 and 2730 as shown in Chart 1 above.

Chart 2

According to this metric, a sustained rise above 2728 would be necessary next week to turn near term momentum positive and thus confirm that the larger broad market advance has resumed.

While Charts 1 and 2 above lay out the parameters for a positive and negative resolution to the US broad market’s current decision point at the 200-day MA, Charts 3-5 below indicate how the market looks right now, under the hood, going into the long holiday weekend.

Investor Assets Are Still Contracting

The blue line in the lower panel of Chart 3 below plots the daily total net assets invested in the SPDR S&P 500 ETF (SPY) since December.  The red line plots these assets’ 21-day moving average, which we use to identify a monthly trend of expansion or contraction.

Investor asset flows measure day-to-day investor conviction in a price move.

Chart 3

The red highlights show that these assets shifted to a trend of monthly contraction as of March 16th, and that the previous similar trend triggered and fueled the early February to early March weakness in SPX (upper panel).  As long as this trend of monthly contraction remains intact, more near term market weakness is likely.

Corporate Bond Spreads Are Widening

The red highlights in the upper panel of Chart 4 below show that the BofA Merrill Lynch US High Yield Master II Option-Adjusted Spread has been in the midst of a monthly widening trend, as indicated by its position above its 21-day moving average, since February 2nd.

Monthly widening in the spread indicates that the bond market is pricing in a near term increase in credit or repayment risk for these bonds, one that has historically coincided with a weak/declining stock market.

Chart 4

As long as the spread remains in a trend of monthly widening, history suggests the stock market is going to have a tough time making and holding gains from the 200-day MA.  Put another way, it would take a sustained narrowing in the spread next week, below its 21-day moving average at 362 basis points, to indicate these bond market fears have abated enough to support the beginning of a new leg higher in the US stock market.

Market Breadth Is Weakening

The blue bars in the upper panel of Chart 5 below plot the Advance/Decline Line based on NYSE common stocks, which is calculated from the percentage of advancing stocks minus the percentage of declining stocks (rather than using the raw numbers).

The red highlights show the A/D line has been below its 21-day moving average since March 22nd, indicating a trend of monthly weakening, and that the previous two instances of this coincided with declines in the S&P 500 (lower panel) in early November 2017 and in early February.

Chart 5

It would take a sustained rise in the A/D next week, back above its 21-day moving average, to indicate that market breadth is once again strong enough to fuel and sustain a broad market rally.

All Contents © Copyright 2005-2018 Asbury Research LLC. The contents of all material available on this Internet site are copyrighted by Asbury Research LLC. unless otherwise indicated. All rights are reserved by Asbury Research LLC., and content may not be reproduced, downloaded, disseminated, published, or transferred in any form or by any means, except with the prior written permission of Asbury Research LLC., or as indicated below. Members of Asbury Research LLC. may download or print web pages for personal or academic use, consistent with their user agreement. However, no part of such content may be otherwise or subsequently reproduced, downloaded, disseminated, published, or transferred, in any form or by any means, except with the prior written permission of and with express attribution to Asbury Research LLC. Copyright infringement is a violation of federal law subject to criminal and civil penalties.

Asbury Research subscribers can view our latest research on the US stock market, market sectors, US interest rates, ETFs and commodities, as well as a table with our current picks in US stocks, ETFs, and global indexes, by logging into the Research Center via the big gold button in the upper right corner of the screen.

Subscribers and interested investors can view our most recent closed out trade ideas by Clicking Here.

To non-subscribers:  Request more information about us, including service and pricing options, by visiting our Contact Us page or by calling 888-960-0005.


What To Buy vs. When To Buy: A Case Study

Editor’s Note: One component of our research services is to provide specific trading ideas in individual stocks and ETFs. The common belief among many investors is that if you can figure out what to buy, you’ll make money.  In our view, much more important than knowing what to buy is knowing where to buy.

When I was a young man working on the trading floor of the Chicago futures exchanges in the 1980s, I often heard traders saying something like this: “I was right about that market all the way up, and still lost money!”.   Although it took me a long time to figure out what that meant, what these traders were saying is that they were making good picks, but buying them when the risk/reward characteristics were unfavorable.

For example, buying a stock that has already risen by 10% over the past 2 months, as attractive as it may be to do so, is often not a great time to buy.  These stocks are usually vulnerable to a corrective pullback, which means that you can theoretically buy a good stock that immediately moves against you by 5%-6% percent, perhaps forcing you out, before you can reap the benefits of ultimately higher prices.  Or, if you choose to hold on to it, it may take another 2 months for it to get back to the price you bought it, which can present opportunity risk of not buying another stock that is still going up.

With this in mind, we employ a strict criteria of what, and where to buy stocks and ETFs.

  1. The stock/ETF must first pass our initial quantitative and technical screen, which identifies assets with strong trends and good internal strength.
  2. The stock has to be moving back to the previous trend following a period of sideways trading (consolidation).
  3. The initial risk on the idea has to be 5% or less.
  4. The initial risk to reward ratio on the idea has to be 1:3 (risking $1 to make $3) or better.

With this methodology, we address both what to buy and when to buy it.

A good recent case study of this is Edwards Life Sciences (EW), which we displayed and discussed in our January 22nd Asbury Alert report entitled Edwards Lifesciences Corporation (EW) Resuming 2014 Advance (access requires subscription).  EW provides products and technologies to treat structural heart disease.

The chart below shows that, at the time of our January 22nd report, EW was rising above its September 2016 major downtrend line following about 17 months of sideways investor indecision.  This emerging breakout indicated the stock’s larger 2014 advance was resuming and targeted an eventual, additional 30% rise to 161.00 with only 5% of initial risk, giving us the initial leverage we needed to present the idea to subscribers.

EW Weekly: 2015 to January 19th

The next chart, a newly updated version, shows that EW has since risen by 14%, to $141.34 per share, but still has an additional 15% to go before meeting our $161.00 target.

EW Weekly: 2015 to March 20th

The point here is not that this idea has worked out well, but rather that the risk to reward ratio was a very attractive 1:6 (risking $1 to make $6) when we initiated it.  This kind of favorable ratio gives us the ability to go into a tough period (which every trader goes through) where we may only be correct on half our ides, and still be profitable.

Finally, we incrementally move our protective stop up as the stock rises, to lock in open trade gains as we go.

 

Asbury Research subscribers can view our latest research on the US stock market, market sectors, US interest rates, ETFs and commodities, as well as a table with our current picks in US stocks, ETFs, and global indexes, by logging into the Research Center via the big gold button in the upper right corner of the screen.

More strategy and performance-related information about our individual stock and ETFs ideas, and also our Correction Protection Model (CPM), can be viewed by clicking the highlighted links in this sentence.

To non-subscribers:  Request more information about us, including service and pricing options, by visiting our Contact Us page or by calling 888-960-0005.

NEW: In April our new firm, Asbury Research Management (AIM), will begin producing a free monthly video that that includes an overview of the US financial markets, and discusses our investment style and current ideas.  To sign up, Click Here to go the AIM website or call 844- 4 ASBURY (844-427-2879).

 

 


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All Contents © Copyright 2005-2018 Asbury Research LLC. The contents of all material available on this Internet site are copyrighted by Asbury Research LLC. unless otherwise indicated. All rights are reserved by Asbury Research LLC., and content may not be reproduced, downloaded, disseminated, published, or transferred in any form or by any means, except with the prior written permission of Asbury Research LLC., or as indicated below. Members of Asbury Research LLC. may download or print web pages for personal or academic use, consistent with their user agreement. However, no part of such content may be otherwise or subsequently reproduced, downloaded, disseminated, published, or transferred, in any form or by any means, except with the prior written permission of and with express attribution to Asbury Research LLC. Copyright infringement is a violation of federal law subject to criminal and civil penalties.