Top Materials Stocks: Trading Opportunities For Next Week

TM Editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

A security pattern traces the distinct movements of security prices that, once recognized, help traders to make informed trading decisions. These patterns are identified by their vital geometrical elements, which are formed by changing security prices. Let's look at some materials stock opportunities by analyzing these patterns.

Buy Signal for Gatos Silver (GATO(Broadening Top)

A "Broadening Top" pattern forms when the price of a security progressively makes higher highs (1, 3) and lower lows (2, 4) following two widening trend lines. The price is expected to move up or down past the pattern depending on which line is broken first.

This type of formation happens when volatility is high or increasing, and when a security’s price is moving with high volatility but with little or no direction. It can potentially indicate growing investor nervousness and indecisiveness.

Trade Idea:

  • Buy near the breakout (entry) price – $3.71.
  • Sell at the target (exit) price – $4.23.

Trend trading is a strategy based on the technical analysis of changing market prices. The trend trader often enters into a long position when a stock is trending upward and uses the short position when a stock is trending downward.

Buy Signals for for Alcoa Inc. (AA),  Olympic Steel, Inc. (ZEUS), & Newmont Goldcorp (NEM)

Trade Idea:

  • Buy at the opening of the stock market on Monday if the opening price has gone up by no more than 0.5% of Friday's closing price.
  • Sell after the price has risen by 2% from Friday's closing price, or at the end of the trading week if the target is not reached.

Buy Signal for Freeport-McMoRan Inc. (FCX)

Trade Idea:

  • Buy FCX at the current market price if seen as appealing.
  • Sell FCX after receiving the "sell" recommendation from trusted analyses.
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