Nevsun Resources Candle over Candle Swing Trade (9/25/13)

Nevsun Resources Ltd. (NSU) is a gold mining and exploration company with over 990 full-time employees that’s headquartered in Vancouver, Canada.

From a fundamental analysis point of view, this company is rocking it with over half-a-billion in sales in 2012. It has a sizzling hot forward P/E ratio of 6 and it’s P/B is just over 1.

The company has over $340 million and no debt! A huge cash pile and no debt is always hot folks. It means Nevsun (NSU) has options for what it does with its cash. It also makes it an attractive acquisition target. It means that Nevsun (NSU) is pretty darn good at what it does.

The company is transitioning from gold production to a low cost copper concentrate producer. Nevsun expects to produce 200M lbs copper per annum from Q1 2014 on.

To do proper fundamental analysis on a mining company is beyond my skill set and really requires some knowledge of geology but that’s ok because what I really like about Nevsun (NSU) is the chart and the swing trade setup.

Dudes! Is that a sweet chart or what? Right? You know what I like. It’s got a history of bouncing off this level for some quick gains. The RSI is at a level that it has repeatedly bounced off of. The StochRSI just broke about the 0.2 line. A candle over candle pattern has formed on the chart.

We marry beautiful or nice (or both) women guys, not stocks. I just want a move back up to $3.50 or the 200 day moving average line. That’s a 6.7% move from the closing price today. That’s a pretty tight range so if you can’t profit off that move, you should pass on this stock trade.

Disclosure: I do not hold any stock in NSU and I was not paid to write this article.

Six months ago, Asmara Eritrea posted a video about Nevsun Resource’s Bisha mine and plant. Check it out.

Terrified Bond Traders Pile Into Money Markets (9/17/13)

Money continues to flow out of bonds and into money market accounts. Most people do not even know that this is happening, let alone why. As bond yields rise, it means rates of all sorts of things rise including rates paid out to money market accounts.

The chart below shows money coming out of assets that are negatively impacted by higher rates, like Treasury bonds, Municipal bonds, and equity funds that are fixed income funds tied to bonds.

Notice that money really started flowing into money market funds at the start of May when the Federal Reserve first hinted that stimulus tapering was coming. Compare the chart above with the 10 year bond price chart below.

In a rising rates environment, savers will benefit. The rates on certificates of deposit, savings accounts, and money market accounts will all go up.

So far the flow of money into money markets seems to be directly proportional to the drop in bond prices. This is not necessarily a bad thing. It means that most of the money going into money market funds is coming out of bonds and not stocks. If we start to see money coming out of stocks and going into money markets, then we might have something to worry about.

Shanda Games at Oversold Support Level (9/16/2013)

China stocks may be coming back into favor. Chinese game developer Shanda Games (GAME) is making some big moves in the mobile gaming space which may have turned profits around.

The company’s revenue of $175.6 million was down just 4% from the year-ago quarter, that’s a lot better than the 20% drops it has reported on the two previous earnings reports. (Source: This Beaten-Down Company Is Getting Better)

The stock is dirt cheap with a trailing P/E of just 6, and a forward P/E of 4.57. This is not a micro-cap stock either. They have over 2,200 employees with a market cap just over $1 billion.

Shanda has been focusing on mobile gaming. Earlier this year, Shanda had the 5th grossing game on Google Play called Million Arthur. Million Arthur became the second top-grossing app on Apple’s app store in China. Shanda went from having zero in mobile game revenue last year, to $17 million as of the last earnings report. Shanda believes that 50% of all its revenue will come from mobile gaming over the next couple of years. Shanda has 36 mobile games scheduled for release in the coming months.

But the real beauty is the stock chart of Shanda Games (GAME).

GAME is at a major support level that it has bounced off of 4 times over the last 4 months. The stochastic is oversold. The stock is coiled up into the apex of the Descending Triangle pattern and it’s going to break either up or down. You want to set a tight stop loss just below that major support level drawn with a horizontal line on the chart above. The goal is a 5% to 10% pop then get out. We don’t marry stocks.

Disclosure: I do not hold any stock in Shanda Games (GAME) nor have I received any compensation to write this article.

Advanced Retail Sales Numbers Not Bad (If True)

Folks, you know I’m no cheerleader for the market. I don’t have any vested interested to hold a certain opinion either.

The way I see the Advanced Retail Sales number that was just released this morning is that it’s not bad, provided it’s true and not revised down.

I explained why Retail sales are such an important barometer to watch on the health of the economy here: The Harbinger: The Sector That Holds the Future of the U.S. Economy

The Advance Retail Sales Report released this morning shows that sales in August were 0.2% month-over-month. That’s not bad. While it may be a decline from July’s 0.4% (July was revised up from 0.2% to 0.4%), the longer term trend is still a thing of beauty.

I have nothing bad to say about that chart. Looks good and it tells us that despite the bad earnings season, lack of meaningful job growth, and the drop in U.S. GDP, consumer spending and retail sales continue to march upward for now.