MindMed
Despite the market’s headwinds, MindMed (MNMD)’s shares are trading 6% higher today as the stock has two drivers in place.
Robert Barrow, the company’s CEO, is slated to appear on Mad Money with Jim Cramer tonight on CNBC. The CEO is likely to talk about progress with their pipeline, including MM120, an LSD-based treatment for generalized anxiety disorder.
More excitingly, shares of MindMed are pushing higher through the $10 level again as positive momentum for the shares is growing.
A slight increase in trading volume last week tested resistance at $12, which quickly reversed back to what the chart is showing as strong support at $10. Stocks that cross $10 usually see an increase in volume as institutions and other larger investors take note of the move.
There are signs that the options market is starting to take notice of this biotech name.
The May expiration options have seen increased activity at the $11 and $12 strikes, suggesting that there is a growing crowd of investors that are targeting another rally in MNMD stock.
From a chart perspective, a break above $12 would open the stock’s horizon for a long-term rally to $15.
As always, I like to disclose that I have both stock and option positions on MindMed.
SPDR Gold Shares
You were on the scent of the recent nine-day 10% rally in gold a little more than a week ago, and it’s time for the exchange-traded fund (ETF) to take a rest.
This morning’s consumer price index (CPI) report splashed a little water on the rally to slow things down as investors are now thinking that the Federal Reserve won’t be too fast to act on interest rates.
“They may be right,” but “you may be crazy” if you think that the rally is over. (Bonus points to anyone that can name that tune.)
Gold’s rally needed a short break, as SPDR Gold Shares (GLD) shares crossed into a technically overbought signal last week. That simply means that the ETF needed a break to recharge.
Gold, along with the miners, may take a short break, but the long-term drivers for this rally remain in place, especially with the hint of inflation in this morning’s CPI report.
Tomorrow’s producer price index (PPI) report will have some serious implications on whether GLD shares pull back to support at $210 or rev the inflation hedge engines to rally above $220. Either way, I look at this as an opportunity.
I always say that the “trend” in gold leads you to the “trade” in the miners.
The short-term weakness is playing out more heavily in the miners, which means that there’s gold in “them thar” markets for those willing to dive into the miners.
I’ll have a short piece on my three favorite mining companies for you tomorrow. Until then, GLD shares look to remain one of the strongest trends in this market.
Costco
Costco (COST) shares are in a technical tug-of-war.
They’re 8% off their pre-earnings highs on March 7. The popular retailer’s shares are trying to hold round-numbered support at $700, but the short-term trend is turning unfriendly.
Last week, COST dropped below its 50-day moving average. The 50-day is what I refer to as the most important trendline for any stock, ETF or market index. It literally embodies that popular saying, “the trend is your friend,” when it is trending higher.
The good news is that Costco’s 50-day is still trending higher. The bad is that the faster-moving 20-day moving average is now below the 50-day.
Inversions of these two trendlines indicate a shift in momentum, or a technical transition period that can often result in the reversal of longer-term trends.
Here’s how it plays out.
Costco bulls, like me, need to watch the stock’s strength at $700. A successful rally from this price will level the stock’s 20-day out and begin to work things above the key 50-day trend. From there, we should see technical buyers will step in to buy the stock in anticipation of another rally towards $800.
Failure for COST to remain above $700 will cause the short-term 20-day to begin acting as resistance and the 50-day trendline to reverse into a declining pattern.
That’s your sign that the stock is set for further declines.
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.