Long Term Trends: Part 3: Minerals, Metals, and Mining

With the Multi-Year Globalization Trend in place, minerals and metals are in high demand. Growing economies especially in the emerging markets need minerals and metals such as copper, driving up demand.

Gold is often used as a hedge against inflation.

Specialty metals are also in demand. For example, new generations of airplanes need lighter materials that specialty companies can provide.

Companies include:

1. Freeport McMoran (FCX), Gold and Copper Company
   
2. Rio Tinto (RTP), Copper, Aluminum, Gold and other materials and minerals.
   
3. US Steel Corp (X), Steel Company
   
4. Michel Steel (MTL), Russian Metal and Steel Company
   
5. Posco (PKX), Korean Steel Products
   
6. Norilsk (NILSY.PK), Russian Nickel Company
   
7. iShares Gold ETF (GLD)
   
8. iShares Silver ETF (SLV)
   
9. Precision Castparts (PCP), Specialty Metals
   
10. Allegheny Technologies (ATI), Specialty Metals
    
11. Peabody Energy (BTU), Coal Company
    
12. Joy Global (JOYG), Mining Equipment Company
    
13. Bucyrus (BUCY), Mining Equipment Company
    
14. Layne Christensen (LAYN), Mining Equipment Company
    

Stock Chart: AMTD, Ameritrade, Nice Turnaround (June 18, 2007)

Ameritrade ( AMTD ), has come back nicely after a 1 year downtrend. We recently see the Golden Cross, where the 50 day Moving Average goes above the 200 day Moving Average. The stock also broke above the $19.69 resistance, and the stock is both above the 50 day and 200 day moving average. The turnaround looks intact, though some might argue that the stock may be overextended above the 50 day and 200 day moving average.

To check the status of AMTD on a daily basis, here's a specially formulated stock chart of AMTD.

Turnaround Stock Patterns

If you've been following this blog , you may have noticed that there are many other stocks with similar turnaround patterns. The general idea is that you can draw a downtrend line on the a semi-log chart pattern and see if there is a breakout on good volume. It would also be nice if this breakout coincides with the stock going above either the 50 or 200 day moving average.

Yes, you can't always catch the optimal buy point, but you can still buy a stock if it remains in an uptrend, and if it is above both the 50 and 200 day moving average.

Other Stock Examples

1. GLW (Corning) Chart

2. DELL (Dell) Chart

3. BTU (Peabody Energy) Chart, a Coal Company.

Stock Chart: BTU, Peabody Energy, Coal Company is Coming Back

Peabody Energy (BTU) is a Coal Company. For one year, from around May 2006 to early April 2007, BTU had been on a downtrend. Then on April 2007, it spiked up on good volume, breaking the one year downtrend line, and has gone above the 50 and 200 day moving average. This would have been a great Buy Point.

This jump in Peabody Energy (BTU) also coincided with the time that Warren Buffett had been buying the rails. Jim Cramer has said suggested that this play is an indication that Coal is not over .

Even if you didn't catch that point, the 50 day moving average has moved above the 200 day moving average, which is a bullish sign. BTU is also above previous resistance of $48.46, and has broken out of a Dec 2006 to April 2007 Bullish Cup and Handle pattern. BTU is also above both the 50 and 200 day moving average.

Even if you didn't catch BTU at the ideal buy point, you still may be able to catch BTU's run, as the new uptrend is still intact.