Market Overview

3 Materials Stocks Starting 2016 With Huge Keltner Breakouts

3 Materials Stocks Starting 2016 With Huge Keltner Breakouts

While most technical stock traders are aware of the popular Bollinger Bands metric, a similar tool used to assess momentum and changes in market trend is the Keltner Channel. While Bollinger Bands are standard deviation bands enveloping a simple moving average, Keltner Channels are multiples (usually 2x) of the Average True Range (ATR) of a stock enveloping an exponential moving average (usually 20-day EMA).

Traders often watch for breakouts above the upper Keltner band as a sign of bullish short-term technical momentum. After a rough year in 2015, here are three materials stocks that are starting off 2016 with a Keltner Channel breakout bang.

General Steel Holdings Inc (NYSE: GSI)

Through Christmas Day, General Steel had booked a more than 75 percent drop in 2015. However, the stock has since spiked on massive volume, and a 105.7 percent boom on the first trading day of 2016 sent the stock plowing through its upper Keltner band. Shareholders are watching for the stock to settle back into the $3-4 range it traded within from June until the end of October.

Harmony Gold Mining Co. (ADR) (NYSE: HMY)

Like many gold miners, Harmony was hit hard in 2015 but has gotten a boost following the Federal Reserve’s decision to raise interest rates. A more than 14.3 percent gain to start off 2016 pushed the share price above the upper Keltner band and into bullish territory to start the year.

Related Link: This Hedge Fund Manager's Worst Ideas For 2016 May Surprise You


DRDGOLD is another gold stock that has started off 2016 on a positive note with a 6.0 percent gain putting it above its upper Keltner band. If the bullish move continues, the stock likely faces technical resistance at the $1.85 level that represents the October high.

Disclosure: the author holds no position in the stocks mentioned.

Posted-In: Bollinger Bands Keltner ChannelEducation Technicals Top Stories Trading Ideas General Best of Benzinga


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