CARBO Ceramics Inc. (NYSE:CRR) dropped sharply today before having a mega reversal. The stock hit a low of $47.01 before reversing the sharp losses and going positive. It just hit a high of $53.96. This is a major reversal and comes after hitting a new 52 week low. When a stock reverses off major losses at a 52 week low, it is often a signal of a major bottom. Heads up to traders and investors looking for a potential long opportunity.
Chief Market Strategist
Just a couple months ago, Janet Yellen issued a warning that biotechnology may be in a bubble. Today, the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) are 20% higher. While Janet Yellen was wrong at the time, we should all remember that Alan Greenspan issued the same warning on Dot.com companies in the late 1990’s. He was early on that call but ultimately right.
Based on technical analysis, it appears biotechnology may have reached a top yesterday. Why? First, the daily chart put in a significant top signal (doji). Today, the move is confirming as the index is declining. This came on the back of an explosive move known to traders and investors as a blow-off top (previous 2 weeks). In addition, stocks like Amgen, Inc. (NASDAQ:AMGN) and Gilead Sciences, Inc. (NASDAQ:GILD) reported earnings. Significant distribution appears to be taking hold on these names. Ultimately, while timing is not Fed Chair Janet Yellen’s forte, nor was it Greenspan’s, it is important to take it as an important heads up. Combining their viewpoint and the charts could yield a significant shorting opportunity worth 30% or more.
Chief Market Strategist
This morning, the leading social networking stocks are coming under some heavy distribution. The catalyst for today’s decline in the social networking stocks comes after the poor market reaction to the Facebook Inc (NASDAQ:FB) earnings that were released last night. In sympathy to the decline in Facebook Inc stock you will also see weakness in Twitter Inc (NYSE:TWTR), and LinkedIn Corp (NYSE:LNKD).
A way that traders can play the social networking sector is by using the Global X Media Index ETF Funds (NYSEARCA:SOCL). According to the weekly chart of SOCL it appears that the leading social networking stocks are likely to trade lower in the near term. It seems that the SOCL will have chart support around the $16.50 area. This was the level where the SOCL was defended by the institutional money back in May 2014. Often, old pivot areas will serve as solid support when retested. Either way, traders should expect a further pullback in the near term in the social networking stocks.
Are you ready to enter the next winning trade when it presents itself? Take a look at our recent trades in the Research Center track record here. Then step up and get on the right side of the trade; enter the Research Center for 7 free no obligation days and view all of the latest calls live right now.