September 6, 2016

Stock Alert and Chart Analysis: UUP


  In these stock alert and chart analysis posts, I want to point out a security that has a very interesting chart and/or serious buzz in the social media sphere or mainstream media.

  To help understand these alerts and chart analyses, consider checking out how I perform technical analysis here and how I trade breakouts here.

  Okay, back to the good stuff!

  First off, why is the US dollar important? Why should I care about the US dollar? Excellent questions and there are a number of reasons for both. Here are the most important reasons to keep an eye on the US dollar in my humble opinion:

1. The US dollar is by far the most used international reserve currency, more than double the Euro.
2. A gigantic portion of foreign debt is denominated in US dollars.
3. A strong dollar typically indicates a strong US economy and increased foreign capital investment in the United States.
4. A strong dollar typically provides downward pressure on inflation and commodity prices.

  Therefore, keeping an eye on the US dollar can reveal a wealth of information on critical aspects of the US economy and markets.

  Okay, let's get to work!

Stock: UUP, PowerShares DB US Dollar Bullish ETF.

Long-term Weekly Chart Technical Analysis:

UUP is in a long-term bull flag that started back in March of 2015. UUP just recently had a failed BO in July and those buyers suffered. At the present moment, UUP is showing some further weakness as it's headed down to support again.

Long-term Gameplan:

At this point, UUP is not revealing much other than being in a mild bear trend since last year. UUP is approaching key up-trendline support and could bounce. However, because this is a long-term bull flag, it could go all the way down to the bull flag support line. Overall, UUP is telling us that money is coming out of the US dollar until we get more information.

Short-term Daily Chart Technical Analysis:

Short-term wise, UUP broke out above the important descending trendline and is currently in BOPB mode approaching a good entry point for longs at $24.50ish. If this level doesn't hold, there is support at the up-trendline as a last resort. Otherwise, we could see much more selling if those levels don't hold.

Short-term Gameplan:

Great BOPB long entry here around $24.50 for longs with a tight stop or wide stop below the up-trendline. Last ditch effort for longs would be an entry at the up-trendline line. If that fails, it's looking no beuno guys and gals.

What are your thoughts? Let's discuss it in the comments below. Remember, "Two heads are better than one!"


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