$TWTR – does Twitter have a future?

At these price levels Twitter is a good acquisition target, the evidence of that were the buyout rumors that created a short term chaos is Sept-Oct 2016 time period. Following that the pattern normalized and invited some skeptics over to keep selling and selling short. We see evidence of rejection at $17 price level and intermediate term trading range targeting $14 price level from May 2016/all-time lows. The $14 price level may spark bargain hunter buying and additional acquisition rumors. For now the daily chart is forming head and shoulders pattern which is a bearish sign. Most indicators are bearish too. Intermediate/short term Target $14.

TWTR 01.05.16 daily

 

finviz dynamic chart for  TWTR

The Gold Standard

We keep hearing “Buy gold, buy gold, buy gold! You need gold in your IRA! My friend gold dealer can give you a great deal on gold if you call now 1800-..! The world is about to collapse and US dollar will become worthless, so buy gold! Etc.” We are so used to the hype of gold that when we are in the market for actually adding gold to our portfolio we tend to follow the noise of the media and buy into physical bullion or coins.

We normally ignore the transaction costs  (commissions) and liquidity (ability to liquidate fast) of physical gold and the effect it has on our portfolio and investment returns. Additionally since there is so much noise around gold most average investors tend to overlook the value of investing in silver and copper as substitute. These less pricey metals remove entry barriers for investors with smaller capital base and allow for larger growth potential being priced at a fraction of gold. These metals also trace the price of gold pretty accurately being in the same market sector. For example at market close on 11/18/16 silver was trading at 16.57 (fibonacci retracement 61.8) from the 2016 high of 21.14 in July and all time high of 44.18 in August 2011. The untrained eye may see a drop in price and therefore most average investors will be abandoning their positions. The professionals will be getting ready to buy at this bargain level for the year since the overall long term trend is still up on the weekly chart. This is just one of examples.

Daily Chart below for Silver/Dollar

silver-11-20-16

Weekly chart below for Silver/Dollar

silver-weekly-11-20-16

Such analysis helps punch through media noise and allow for unbiased objectivity and decision making. So the alternative to physical gold or silver would be an ETF that tracks the metal prices or a mining company stock that tracks these precious metals prices very closely. By using these vehicles in our portfolios the cost of transaction is greatly reduced (small trade commission) and liquidity increased because we can liqudate any time the market is open. On the contrary in order to liquidate physical gold or silver average investor will have to compromise in terms of price and transaction costs and actively look for buyers with a possible negative effect on gains and portfolio. The case for ETFs and stocks is clear at least when it comes to metals. Below are examples of ETFs and mining companies stocks as great alternatives to holding physical metals.

 

First Majestice Silver Corp – AG (silver)

finviz dynamic chart for  AG

Market Vectors Gold Miners ETF – GDX (gold)

finviz dynamic chart for  GDX

iShares Silver Trust ETF – SLV (silver)

finviz dynamic chart for  SLV

 

Also the new Trump administration may be calling for return to gold standard may be another reason to be adding metals to your portfolio

This Trump Economic Advisor Wants America to Go Back to the Gold Standard

Copper is still in the uptrend and is likely targeting a consolidation level from 2014 of $25 based on this

Global X Copper Miners ETF (copper)

finviz dynamic chart for  COPX

 

 

A case for Egypt

A seemingly unknown economy in the middle east called Egypt is undergoing a big change in terms of its government and economy. Egypt is establishing itself as a major player in the middle east on par with Israel and Dubai.

Egypt economic outlook growth is set to normalize at around 4% per year which is better than most western and asian economies. Newly elected president Al-Sisi is economically minded president that indends to lead Egypt to more sustained growth and economic prosperity. Al-Sisi has achieved economic stability and induced Moody’s and other rating agencies to raise the outlook to ‘stable’. Egypt index chart below has growth potential of 100% over the next 2 years based on the technical analysis indicators.

finviz dynamic chart for  EGPT