Navigating Success: Top Stocks of 2016

Top Stocks of 2016: Uncover Profitable Opportunities

Updated Aug 2023

We are going to explore this topic from a historical perspective for two straightforward reasons. Firstly, it vividly illustrates the adage that those who neglect to learn from history are destined to repeat it. Secondly, and perhaps more significantly, it showcases our real-time actions. We don’t merely speak about it; we actively demonstrate it. Our primary instrument is mass psychology, which we employ to identify pivotal moments. We then refine our approach with technical analysis, utilizing TA to pinpoint the optimal entry points while relying on mass psychology to ascertain the overall trend.

 

FXI  Moving  To  the Bullish Zone

The trend continues slowly toward the bullish zone, but it’s still neutral. We are already witnessing early signs of strength in some stocks; one stock that has been on fire and never looked back is TCEHY.  Stocks like BABA, BIDU, QIHU, etc, are putting in nice bullish formations.

Even though we do not have a bullish Crossover from the MACDs, many stocks are already breaking out in China; some examples are NTES, TCEHY, etc. The MACDs could experience a bullish crossover any day now.  Our overall long-term outlook remains bullish.

 

DIA Ready To Roar

The weekly charts are trading in the overbought ranges, so a nice consolidation or a decent correction on the weekly charts will make for a splendid buying opportunity.  There is no need for a sharp correction, even though we would gladly embrace one.  Our weekly indicators need to move into the oversold ranges, and the trend should not change; it is showing no signs of changing.  May 17th Update 

The resilience of this market illustrates just how powerful of a tool the trend indicator is and how dangerous it is to go against it. Even though everything was lined up for the markets to pull back, the markets have refused to do so. Also, the long-term pattern continues to improve.  Looking at this chart one would think that the Dow and the overall market were oversold; unbelievable, right, but it is what it is and we never fight the trend.

Navigating Success: A Closer Look at the Top Stocks of 2016

Gold  Trade Update 

Gold has not done much, and the picture is rather dismal compared to oil.  Oil continues to trend higher, while Gold is having difficulty trading past $1300. May 17th Update 

While one can state that the move in Gold bullion is typical, one cannot say the same for Gold and Silver stocks. They experienced extreme upward moves. Something seems to be off here because they have experienced such decisive actions, but Gold Bullion has not even made it past $1400. The current prices are more reflective of Gold trading north of 1650.

Unusual Patterns In the Gold Market

Gold did something somewhat unexpected. It rallied in the face of a rising dollar. This could be construed as a long-term signal that Gold is decoupling from the dollar and trading upwards on its own merits. The biggest surprise has come from Gold stocks, they have mounted ferocious rallies, but for some reason, Gold bullion is not trading at levels that would justify such prices.  Perhaps this action was due to an overreaction in the process leading to Brexit, and then when Brits voted for Brexit, it could have triggered more fears. Whatever the reason, we are not going to hide behind excuses.

Gold Trend Building Momentum

The move was strong, and congratulations are to those who played well.  The trend was not positive, but we did learn something from looking at several markets.  If the trend is neutral and several of our Custom indicators are trading in the extremely oversold ranges and about to experience bullish crossovers, then some risk is worth taking.  The change has been very profound over the past 6-9 months; we have seen this occur in several markets, and Gold was the latest of the markets to validate new developments.

Let’s see how the stock GOLD reacts after it tests its old highs. As the pattern is strong and MACDs and several other indicators are trading far from the overbought ranges, Gold will probably trade to $1450 before it runs into solid resistance.  Those willing to take some risk could use strong pullbacks in Gold bullion to open positions in Gold stocks.

Powerhouse Performers: Examining the Top Stocks of 2016 for Investment Potential

Oil Market Outlook

Oil continues to follow the projected path with perfection and no interruption; contrast the action in oil to that of Gold. The trend moved from neutral to positive quickly, which is a rather interesting development. However, the score is not very high; normally, the trend swings into the extreme bullish zone. We have a mildly bullish trend.  This suggests that we should wait for the indicators in the weekly chart to move into the oversold ranges again, or oil has to let some steam and shed at least $10.00.  Update May 17th, 2016 

A monthly close above $55.00 will virtually guarantee a test of the 65.00 range with a possible overshoot to $70.00. The trend has strengthened, and we might get the $10.00 pullback we sought.  On that note, the stock PZE and a few others are showing signs of strength during this pullback, so we will reevaluate our decision to close the position out.

We have a bullish crossover on the custom MACD so $55.00 will be hit at the minimum, though do not expect this to be in one shot. Every week, Oil is overbought, so it’s ready to consolidate.  Update May 17th, 2016

Oil traded almost to $52.00 before pulling back, missing our target of $55.00 by just 3 dollars. To be fair, though, we suggested that Oil would not hit this target in one shot, so the current consolidation is setting the bedrock for a potentially more decisive move.

Top Stocks of 2016: Additional opportunities 

The trend is still neutral on Turkey but continues to inch closer and closer to the bullish zone.

Some funds can be deployed at the current levels, and some on a possible test of the $35.00-36.00 ranges. Note these are suggested entry points; you can fine-tune these entry points to suit your trading style.  May 17th, 2016 update 

Getting in at 38 or better should have been easy for those who followed our suggestion.  The stock is trading up nicely, and all pullbacks should be viewed as buying opportunities for those willing to take on a small amount of risk. We use chance only because the trend has not turned positive. Another way to play Turkey is via the leading Telephone Company Turkcell (TKC).  Traders can look to open positions at 9.00 or better and use strong pullbacks to add to their position. The stock could trade as high as 12.00 before running into resistance.

 

May 17th, 2016 Update

 

Top Stocks of 2016 In China

FXI

One thing that jumps straight out at you is the massive channel formation.  This channel is extremely impressive because this is taking place on a monthly chart.  If you want to retire a millionaire or you don’t want your kids to be part of the 9-5 rat race, then the moment the trend turns positive, keep using every pullback to load up on Chinese stocks.   From April 14th Update 

The massive channel formation (roughly at nine years in the making) is one of the most significant channel configurations we have ever seen.  When the trend turns positive, expect huge moves.

 

Top Stocks of 2016 In the Dow

DIA

The sentiment is currently somewhat bullish, and anxiety levels are lower, but we also have a lot of individuals in the neutral, indicating that there are still a lot of uncertain individuals out there.  The trend on the SPX refused to turn positive and remains stuck in the neutral zone. This means one thing only; expect huge volatility this summer. April 14th Update 

The weekly charts are trading in the overbought ranges, so a nice consolidation or a decent correction on the weekly charts will make for a splendid buying opportunity.  There is no need for a sharp correction, even though we would gladly embrace one.  Our weekly indicators need to move into the oversold ranges, and the trend should not change; it shows no signs of changing.

 

Top Stocks of 2016 In The Gold Sector

 

 Overall, we expect Gold to paint a false picture of a perfect breakout; however, unless the trend turns positive, this breakout will fail and send shockwaves through the ranks of Gold bugs. One negative factor for Gold is that the dollar traded to new six-month lows, but Gold could not trade to new six-month highs. This indicates that unless the trend turns positive, no matter how strong Gold rallies, all rallies will fail. April 14th Update 

Gold has not done much, and the picture is rather dismal when you compare it to oil.  Oil continues to trend higher, while Gold is having difficulty trading past $1300.

As we have stated before, we are not pessimistic about Gold, though whenever we publish an article that hints that all is not well in  Gold, the Gold bugs attack us like rabid dogs.  We view this as a positive development, for hope springs eternal and stupidity knows no limits.  Until the trend turns positive, we don’t care what the experts say about how high Gold will trade. The trend is still neutral, so the odds increasingly favour a sudden and intense pullback, especially as the dollar appears to strengthen. Note that, unlike Gold, Oil has continued to trend higher even as the Dollar strengthened over the past several days.

 

Oil

The trend has turned neutral, and Oil, as we stated, followed the projected path and bottomed in Feb. It also pulled back to the 35.00 range as projected before trading past 41.00 and is now attempting to make its way to the 45.00 range. Against this backdrop of gloom and doom, oil prices bottomed, indicating that Euphoria and Panic once more serve no purpose but to help draw you one step closer to the cliff’s edge. April 14th Update 

Oil continues to follow the projected path with perfection and no interruption; contrast the action in oil to that of Gold. The trend moved from neutral to positive quickly, which is a rather exciting development. However, the score is not very high; normally, the trend swings into the extreme bullish zone. We have a mildly bullish trend.  This suggests that we should wait for the indicators in the weekly chart to move into the oversold ranges again, or oil has to let some steam and shed at least $10.00.

We have a bullish crossover on the custom MACD so $55.00 will be hit at the minimum, though do not expect this is in one shot. Every week, Oil is overbought, so it’s ready to consolidate.  The long-term outlook is still bullish and more so now that the trend has turned positive. It took quite some time for the trend to change, a clear sign that this market is being heavily manipulated.  The oil crash was also engineered; in other words, extreme manipulation was on display. The idea was to take oil down as fast as possible.

Our indicators need to move into the oversold ranges on the weekly charts, or Oil needs to shed $10.00 at least before we jump in.

Top Stocks of 2016: More Option

The trend is still neutral but dangerously close to turning positive. However, we would not bet the house on Turkey even if the trend turns positive as we deal with a deranged president. However, a trend change is still powerful, so it should not be ignored.

The ETF TUR is trading in the extremely overbought ranges on the weekly charts, so it could trade lower than initially projected. However, speculators should view this as a bullish development as the trend is likely to turn bullish shortly.  Some funds can be deployed at the current levels, and some on a possible test of the $35.00-36.00 ranges. Note these are suggested entry points; you can fine-tune these entry points to suit your trading style.

 April 14th, 2016

Dow

The correction that started last year has nicely drained almost all the speculative forces out, thus setting the bedrock for a potentially impressive rally.  The sentiment is still negative, and the trend on the SPX is about to turn positive again. Once it becomes positive, the odds of the markets dropping to or below their August 2015 lows will drop significantly.   March 4th Update

The sentiment is currently somewhat bullish, and anxiety levels are lower, but we also have many individuals in the neutral, indicating that there are still a lot of uncertain individuals out there.  The trend on the SPX refused to turn positive and remains stuck in the neutral zone. This means one thing only; expect huge volatility this summer.

Note that we are using DIA as a proxy for the Dow, and once again, despite the strong rallies, both the custom RSI and MACDs are in the oversold ranges, and the MACDS are about to make a bullish crossover. If they complete this crossover, we can expect a powerful and explosive rally as long the trends don’t change, and if the movement in the SPX should turn bullish, then the rally will be monstrous.

Top Stocks of 2016: New List

While a  test of the August lows would represent a great opportunity, it might not come to pass if the trend turns positive on the SPX.  Our overall feeling now is that any pullback to the 16000-16200 ranges would make for a good entry point, and anything below 15,500 would make for an excellent entry point.   Here is a list of some top stocks that you could look into if you have extra funds.   CALM, OME, FXU, TAST, FIZZ, MXL, NTEX, and NFLX.March 4th Update

V Readings continue to rise, expect one helluva summer; there might be no transition from winter to summer in many parts of the country. Spring could be bypassed, and individuals might move from the cold to the blistering heat.

Gold 

The trend is still neutral; it should have turned bullish by now, so this does not bode well for the poor Gold bugs. They wait for their day in the sun, but it keeps raining. Illustrating that hope and prayers are fools who have too much time on their hands.  One should never waste prayers on markets ruled by greed and driven by stupidity.

The Custom RSI is now trading in the overbought ranges though they can trade in this zone for extended periods, especially when the MACDs are not overbought. In this case, the MACDs still have room to run.  The current set up is indeed interesting, given that the trend has now moved to neutral and that the dollar is not trading to new lows.  Either one of these markets is giving a false signal, or we have entered a new phase where Gold and the dollar could trend in the same direction. March 4th Update

The MACDs are about to make a bearish crossover on the weekly charts. As the trend is still neutral, a bearish cross should result in a test of the 1170-1180 ranges before Gold attempts to trade higher. Overall, we expect Gold to paint a false picture of what a perfect breakout looks like; however, unless the trend turns positive, this breakout will fail and send shockwaves through the ranks of Gold bugs.

Gold has achieved two things: it has closed above $1230 on a weekly basis, and its holding above the 90SMA (Green line on the top portion of the chart).  This is another bullish development. However, we need to see how Gold responds to a pullback.   March 4th Update

One negative factor for Gold is that the dollar traded to new 6-month lows, but Gold could not trade to new 6-month highs. This indicates that unless the trend turns positive, all rallies will fail, no matter how strong Gold rallies are. It also suggests an above-average chance of Gold doing the unthinkable (at least unthinkable in terms of the Gold camp) and dropping below 1000 before reversing course. Remember, while we are bullish long-term on Gold, we don’t fixate on any market. There is no such thing as a perfect market. All markets are manipulated. Don’t fall in love with any market. Gold is just another market among many; that is how we view it.

Traders willing to take on some risk can use strong pullbacks to open positions in the top five stocks in this sector.

The top five stocks in the Gold industry are DRD, GSV, NG, RIC, SA and GOLD.    Note there are some changes from the last update, but GOLD is always on this list and has been on this list for as long as we can remember.  HMY is at number 6 and could move into the top 5 next week. Once Gold bottoms,  it will make sense to purchase Leaps on this stock as it tends to lead gold bullion by a wide margin.

Oil

The trend has turned neutral, and Oil, as we stated, followed the projected path and bottomed in Feb. It also pulled back to the 35.00 range as projected before trading past 41.00 and is now attempting to make its way to the 45.00 range. Against this backdrop of gloom and doom, oil prices bottomed, indicating that Euphoria and Panic once more serve no purpose other than to help draw you one step closer to the cliff’s edge.

The monthly oil chart finally looks decent enough for us to put it up.

Nothing much to add here other than the trend has turned neutral, and this has to be viewed as a bullish development.  Our Custom Indicators are trading in the oversold ranges, so there is still much room to run. If the MACDS experience a bullish crossover, a move to the 55-60 ranges is virtually guaranteed. At that point, future traders should use all strong pullbacks to open long positions in oil until oils trade to 55.00 or better.  Speculators can also apply the strategy to the top-rated oil stocks. However, use leap options to open positions in them.   Three good stocks are PZE, MRO, and TRP; for those looking for big names, XOM is a good option.

 

China Outlook Update 

From a long-term perspective, we still stick by our call that states any level below 3000 makes for an excellent long-term entry point. However, given that we are now in what will be remembered as the most volatile year on record, we have to expect markets to overshoot both to the upside and downside.  Taking this extreme volatility into consideration, the SSEC has to hold above 2500 on a weekly basis. If it closes below this level on a weekly basis, then we are looking at a possible overshoot to the 2250 range. At that point, if you have the money, then consider backing the truck up.   At 2250 China will represent the opportunity Gold at 300 did back in 2003, and long-term subscribers will remember how we were pounding the table on Gold back then.  Market Update Feb 29, 2016 

One thing that jumps straight out at you is the massive channel formation.  This channel is extremely impressive because this is taking place on a monthly chart.  If you want to retire a millionaire or don’t want your kids to be part of the 9-5 rat race, the moment the trend turns positive, keep using every pullback to load up on Chinese stocks.  China’s stock market will explode and trade to levels never seen before. Note its middle class is now the world’s largest.  More individuals in China have 50,000 in assets than in the US. Now China also has the most billionaires in the world.  The middle class will embrace the stock market in the next upward wave, so you can expect a feeding frenzy that the world has never seen before.  Those willing to take on more risk could purchase Leaps of the top stocks. One such stock is NTES.

Additional opportunities 

 

 

The above chart is of the Turkish ETF. It’s a buy, as the trend is neutral and on the verge of turning positive.  MACD just turned bullish, so TUR should trade in the 50.00-plus range. A monthly close of 54.00 will lead to a test of the 60.00 range.  TKC also looks exciting, and we might officially open a position in the stock.

March 4, 2016

Dow

However, the current pullback has scared the hell out of a lot of bulls and pushed a bunch of individuals from the neutral camp into the bearish camp.  And this is a positive development; once the market puts in a firm bottom a ton on individuals will jump out of the bearish camp into the bullish camp and equally large number will jump out of the neutral camp into the bullish camp.Feb 17th, Update 

The correction that started last year has nicely drained almost all the speculative forces out, thus setting the bedrock for a potentially impressive rally.  The sentiment is still negative, and the trend on the SPX is about to turn positive again. Once it becomes positive, the odds of the markets dropping to or below their Aug 2015 lows will drop significantly.

Interestingly enough, two of top secondary indicators are trading in the oversold ranges so the downside action should be limited. Feb 17th, Update 

Despite the strong rally the Dow has experienced (we are using DIA as a proxy for the Dow), the RSI and MACD are both still trading in the oversold ranges.   Other strong bullish factors are:

The Dow did not break below the three faster-moving SMA’s  (blue lines)

It is trading back above the main uptrend line

Finally, the trend in the SPX is about to turn positive again.

Bottom line:

Anticipating a bullish trend, the Dow is poised for a substantial rally. High volatility implies significant effects aligned with our favoured trend indicator. While a test of August lows presents an opportunity, a positive SPX trend might negate it. A pullback to the 16000-16200 ranges is a favourable entry, with below 15,500 being an excellent entry. Explore these top stocks: CALM, OME, FXU, TAST, FIZZ, MXL, NTEX, and NFLX, if you have surplus funds.

Gold Update 

 

The action in the Gold markets has been relatively healthy, and the trend in Gold is now neutral.  One interesting factor is that Gold has put in a higher low for the first time in many months, but we need to see if it can put in a higher low. So far, every rally has failed and led to lower lows. It is important to note that these developments have taken place on the weekly and not monthly charts, but if Gold puts in a lower high on the weekly charts, it will have to be considered a bullish development. If the next pullback leads to a higher low, it will indicate that there is some muscle behind this upward move and that Gold is getting ready to trend upwards.  Nothing states that both Gold and the dollar can’t trade in Unison.

The Custom RSI is now trading in the overbought ranges though they can trade in this zone for extended periods, especially when the MACDs are not overbought. In this case, the MACDs still have room to run.  The current set-up is indeed interesting, given that the trend has now moved to neutral and that the dollar is not trading to new lows.  Either one of these markets is giving a false signal, or we have entered a new phase where Gold and the dollar could trend in the same direction.

 However, given the extended period, these secondary indicators have spent in the oversold ranges, the downside to Gold from here is limited.  Until Gold closes above $1230 on a weekly basis, the outlook favours a test of the $1000 range, with a possible overshoot to the $950-$980 range.  Feb 17th, Update 

Gold has achieved two things; it has closed above $1230 every week, and its holding above the 90SMA (Green line on the top portion of the chart).  This is another bullish development. However, we need to see how Gold responds to a pullback.  If it can put in a higher low, then it will be setting the basis for a possible trend change. It is also worth noting that stocks like GOLD and DRD have performed remarkably well since Gold broke out.  As we have stated for quite some time now,  use strong pullbacks to open positions in Gold Bullion if you don’t have any or if you have extra funds.  Traders willing to take on some risk can use strong pullbacks to open positions in the top five stocks in this sector.

Top Stocks 2016:  New Gold Candidates

The top five stocks in the Gold industry are DRD, GSV, NG, RIC, SA and GOLD.    Note there are some changes from the last update, but GOLD is always on this list and has been on this list for as long as we can remember.  HMY is at number 6 and could move into the top 5 next week. Once Gold bottoms,  it will make sense to purchase Leaps on this stock as it tends to lead gold bullion by a wide margin.

Oil

oil, on the other hand, is still weak, but we are approaching a critical time period which would usher in a bottom. Oil is more likely to bottom out before Gold, based on the current trends, oil should is likely to trade to new lows (though this is not an absolute necessity) one more time before a bottom is in place. After that oil is expected to trade in a tight range which will slowly widen.  Feb 17th, Update 

We will use the XOM, one of the largest oil companies in the world to look at the oil markets.   Overall, Oil bottomed  In Feb 2016 as projected, and as long as it does not close below $30 on a monthly basis, this outlook will hold.

Top Stocks 2016 in the Oil Sector

XOM is highly oversold, and given the beating oil has taken, this stock has held up remarkably well.  We are using it as a proxy for the oil sector. Oil futures data does not show up so well on the monthly charts.  Among the top-ranked stocks in this sector is our very own PZE; it is the number two-ranked stock in the Integrated oil sector, and number one, for now, goes to BAK.  IF XOM does well, PZE will perform twice as better.  In oil production, SE and TRP are good plays. TRP appears poised to break out soon.

China 

 

We will be adding China to this list of long-term opportunities soon until we do follow the guidelines in the last Market update. The Trend, however, is currently Neutral.

From a long-term perspective, we still stick by our call that states any level below 3000 makes for an excellent long-term entry point. However, given that we are now in what will be remembered as the most volatile year on record, we have to expect markets to overshoot both to the upside and downside.  Taking this extreme volatility into consideration, the SSEC has to hold above 2500 on a weekly basis, if it closes below this level on a weekly basis, then we are looking at a possible overshoot to the 2250 range. At that point, if you have the money, then consider backing the truck up.   At 2250 China will represent the opportunity Gold at 300 did back in 2003, and long-term subscribers will remember how we were pounding the table on Gold back then.  Market Update Feb 29, 2016 

 

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