Issue #929
Sep 21, 2025 , | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Confusion reigns but upside momentum persists!
DOW Friday Closing Price - 46315 This past week was a clear win for the bulls and that was even more indicative, given that the Fed rate decision was announced (no surprise) and the reaction was positive. With no possibly catalytic reports due out the next 2 weeks, it does suggest that both seasonal tendencies (August and September) of the indexes correcting (having a red month), will be negated. This is not only surprising, but it does affect the normal fundamental trading patterns, meaning that confusion reigns. Having said that, the market is on an uptrend of consequence and momentum is what is now driving the market (bears unwilling to attempt to stop the runaway train), meaning that the probabilities favor more upside to be seen the rest of the month. All the indexes made a new all-time intraweek and weekly closing high, and closed on or near the high, suggesting further upside above last week's highs will be seen this week. In the DOW that is above 46396, in the SPX that is above 6671, in the NASDAQ that is above 26641 and in the RUT that is above 2472. On a purely chart basis, there is great risk in purchasing stocks, at least those that have been running to the upside. Not only are they overbought but have no close-by support levels that can be used to minimize risk. In the DOW, the closest support level is at 45400 (900 points lower). In the SPX, it is at 6360 (304 points lower), in the NASDAQ it is at 22927 (1699 points lower) and in the RUT, it is at 2329 (215 points lower). The worst part of it, is that all of these support levels are minor in nature (not game changers). This means that a drop down and breakage of these support levels would not change the uptrend (except maybe for the short-term), meaning that a bull getting out upon breakage of those levels would not necessarily be the right thing to do. However, this scenario does mean that the bulls will be cautious (not aggressive) in their buying, and that would suggest the upside is likely to be small or even minimal. One thing to consider is that the fundamental analysis of the SPX shows a wide range of opinions, running from 6600 to 7500, with the average being 6900 by year's end. With the index closing at 6664 on Friday, it does suggest that the index will not likely rise more than 3.5% the rest of the year. One last thing to consider is that this market has been mostly driven by AI, and any news regarding AI that is less than anticipated, could be a catalyst for a correction. One thing that did happen this past week is that NVDA announced that it was investing $5 Billion in a partnership with INTC (former competitor) in the making of chips for AI, and that is seen as a positive but does open the door for problems to occur as it could close the door on cheaper AI chips from other countries, or even problems with the partnership that could be detrimental overall. Having said all of the above, the traders are now going to make daily evaluations on the action seen, and at this time, it is impossible to predict with any certainty as to what will happen the rest of the month. HSI Chinese index made a new 4-year intraweek and weekly closing high(for the 2nd week in a row) but this time it closed in the lower half of the week's trading range, suggesting further downside below last week's low at 26282 will be seen. Having said that, the index broke above an old but clearly defined intraweek resistance at 26782 (high was 27059), and that does suggest that the uptrend has more to go, even though a small correction might occur first. Downside objective of this potential minor correction is 25829 (on a daily closing basis). That was the daily close resistance that brought about this recent rally and retesting that breakout level is a decent probability. Overall target to be reached by the end of the year is now at 29172. Index closed on Friday at 26545.
GOLD(Dec 2025 chart) continued the run to the upside, having for the 3rd week in a row made a new all-time intraweek and weekly closing highs. Gold did close slightly in the upper half of the week's trading range, suggesting a slightly higher probability of going above last week's high at $3743 than below last week's low at $3660. Nonetheless, having closed near the middle of the week's trading range and there being no possibly catalytic news the rest of the month, the possibilities are now 45-55% of a mini correction occurring. The previous all-time daily closing high at $3501 is a potential target, to be reached within the next 3-6 weeks (if a correction is to occur. A daily close below $3673 would increase the chances of that correction occurring. OIL bulls made a new 10-day intraweek and daily closing high on Tuesday, opening the door for more upside, but then failed the rest of the week having negated the buy signal and ending up just $.02 cents above last week's close but closing near the low of the week, suggesting further downside below last week's low at 62.26 will be seen this week. The failure of the bulls has now given the bears new ammunition that will probably cause a break of the 15-week intraweek low at 61.45 and such a break would likely bring about a drop down to at least 59.28. That support is not strong and if broken, there is a lack of support until the $55 level is reached. A daily close above 63.67 would take some of the ammunition away from the bears.
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Stock Analysis/Evaluation
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MENTIONS For this week
At this time and based on what happened last week, the only thing that makes any sense to do is buy low priced stocks that have ties to AI and/or minerals. The tariffs have made minerals attractive to purchase as the need for them continues to be high but the supply is low. AI has been the main thing to buy but finding stocks that are low priced in that industry is hard to do. I did find one stock that fits both items and one stock specific to AI.
PURCHASES
GSTRF Friday Closing Price - .41
GSTRF is a company engaged in acquiring and exploring mineral properties in the U.S., specifically for nickel, cobalt, zinc, silver, lead, uranium, rare earth elements, and copper. The stock has a market cap of around $18.03 million as of early September 2025. In addition, the company stands in this intersection of mineral scarcity, national security, and the AI boom. With Nevada projects strategically located beside TSMC's $165 billion AI chip fabs, and with the state already drawing massive capital through Tract's $100 billion data center buildout and Vantage's $3 billion hyperscale project, Glenstar positions investors at the front line of America's push to secure the resources behind AI, defense, and energy infrastructure.
GSTRF has only been a tradeable stock for the past 10 months and is a penny stock, but also trades on the Canadian Stock exchange. Both of these are negatives to doing the trade. Nonetheless, from the information I have read, this company has a huge upside potential with the only negative being whether they are able to find the mineral resources they need to be successful.
As far as the chart is concerned, the stock has traded between $.04 and $1.00 for the past 10 months, with both the high and the low seen in May. Nonetheless, in July the stock made a new all-time weekly closing high and built on that high for 3 weeks in a row, with the all-time high weekly close now at .617. For the following 3 weeks it corrected back down to .0375 and then on the 4th week, it generated a positive reversal week, meaning that the all-time intraweek low now has been tested successfully. In addition, the previous all-time high weekly close was at .29 and with the stock closing at .375 3 weeks ago and then generating a positive reversal, it can be thought that both the previous all-time low and the breakout level have now had a successful retest.
By the way and as a potential comparison of GSTRF to another minerals company, UUUU has risen from 3.20 to 15.49 over the past 7 months.
There are no stated upside objectives other than the words "huge profit" being stated overall. Nonetheless, using the already established "daily" close support and resistance levels at .346 and at .681 and at 1.00, a risk/reward and probability analysis can be made that fits the 4-1 risk/reward ratio I use.
GSTRF generated an uneventful inside week this past week and closed in the exact middle of the week's trading range, suggesting equal chances of going below last week's low at .363 or above last week's high at .454. Either way, purchases of the stock at last week's close (or below) and using a stop loss at .28 (on a daily closing basis, and having at the very minimum an objective of .681 (but likely 1.00 or higher), offers a 2-1 (or 4.1 using the higher number) risk/reward ratio. My rating on the trade is 2.75 (on a scale of 1-5 with 5 being the highest). The low rating is simply because it is a penny stock and the company has to prove itself before the rating can go higher.
LMND Friday Closing Price - 60.96
LMND is an American insurance company that utilizes artificial intelligence and a digital-first approach to offer a range of insurance products. It traded as high as 188.30 (in January 2021) and as low as 10.27 (August 2023). Since then, the stock has moved up (in conjunction with the AI movement) to last week's high of 61.82.
As all AI companies, LMND is also somewhat overbought (meaning that buying consideration needs to be tempered), but unlike all other AI companies, it is still way below its all-time high and now finds itself still $20 away from the next established resistance level at $80. This makes it an attractive buy.
LMND generated a big 3-year breakout high in November of last year and for the past 2 months in a row, it has made a new high above that breakout (after successfully testing (in April) the breakout level. This suggests the momentum to the upside is high, but at the same time, there is clear support at the previous November weekly closing high at 51.81, as well as the last weekly closing high 57.37, which was broken to the upside this Friday. Last but "not least", the stock is showing a breakaway/runaway gap formation on the daily closing chart, with the runaway gap high being at 52.63. LMND purchase seems to be almost a perfect to-do trade, given all of these factors.
To the upside, LMND has total open air above until 72.55 is reached. Nonetheless, that high was made "before" the all-time 188.30 was made, meaning it probably will not even be looked at. As such, the ensuing downtrend intraweek high of 79.54 (made in November 2021) is the next resistance level the bulls will shoot for. Nonetheless, even that high is seen somewhat as a minor resistance, meaning the momentum and the industry might cause that level to break.
Purchases of LMND around Friday's close of 60.96 (or lower) and using a daily close stop loss at 59.60 and having at 79.54 objective, offers a 13-1 risk/reward ratio. My rating on this trade is a 3.5 (on a scale of 1-5 with 5 being the highest). One thing to mention, is that in order for the stop loss to be dependable, it should be confirmed (meaning 2 closes in a row below 59.70). If stopped out though, I would be a buyer again around $55 level (runaway gap area).
SALES
One last mention and it is a sale. I will be re-shorting ORCL above the $320 area and using a stop loss at 345.82. Specific desired entry point cannot be determined at this time, but it will likely be above $325.
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Updates
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Closed Trades, Open Positions and Stop Loss Changes |
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BCTX made a new 8-week intraweek and weekly closing high and closed near the high of the week, suggesting further upside above last week's high at 9.35 will be seen this week. There is absolutely no resistance above until the $20 level is reached. To the downside, the 8.51 level is now support, which if broken would take away ammunition from the bulls. GRPN generated another red weekly close (6th in a row) but did it in a more indicative way, given that it did go above the previous week's high and then below the previous week's low and did close in the lower half of the week's trading range (suggesting further downside below last week's low at 21.43 will be seen this week), and did it when the indexes made new all-time highs. This strongly suggests that the stock will get down to the mention's objective of $20, before any recovery buying is seen. A rally above last week's high at 24.14 would change this outlook. LXRX generated a 2nd green week and closed in the upper half of the week's trading range, suggesting further upside above last week's high at 1.26 will be seen this week. Pivotal intraweek resistance is found at 1.43 (1.24 on a weekly closing basis). On the daily closing chart, resistances are at 1.24 and at 1.37. To the downside, short-term indicative intraweek support is found 1.06 (1.10 on a daily closing basis. TNC generated a negative reversal week, having gone above the previous week's high and then closing red and near the low of the week, suggesting further downside below last week's low at 80.27 will be seen. With the index market making new all-time highs, this move down seems to be indicative. Intraweek support is at 79.84 and then pivotal at 78.63. A break of this latter level would suggest a drop down to the $74 level would be seen. Short-term indicative daily close resistance is found at 83.12. VWDRY generated an non-indicative inside week with a green close but in the lower half of the week trading range, suggesting further downside below last week's low at 6.01 will be seen this week. The green weekly close was helpful to the bears as the now clear and indicative weekly close support between 5.94 and 5.99 is showing a successful retest of it, with the previous week's close at 5.98 and the close on Friday at 6.08. Nonetheless, it was not a clear and dependable signal, meaning that chart-wise, nothing is yet clear, other than the fact that the bulls have no yet lost their mid-term indicative edge. Using the daily closing chart, the 6.61 and 5.74 levels are now indicative. ZLAB generated a very uneventful week, having a tiny $1.52 trading range (compared to the previous week's $6.39 trading range) and having gone only $.15 cents above the previous week's high. The stock did generate a red weekly close but closed slightly in the upper half of the week's trading range, suggesting a slightly higher probability of going above last week's high at 33.20, than below last week's low at 31.68. On a positive note, the stock did confirm the previous week's break above the 200-week MA (currently at 32.06) and also closed above the short-term daily close support area between 31.49 and 31.92 (closed at 32.65). A daily close below 31.49 or above 33.80 would give extra ammunition to the bears or the bulls.
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1) ZLAB - Averaged long at 65.50 (7 mentions). No stop loss at present. Stock closed on Friday at 32.65. 2) VWDRY - Averaged long at 8.68 (4 mentions). No stop loss at present. Stock closed on Friday at 6.06. 3) LXRX - Averaged long at 1.513 (7 mentions). No stop loss at present. Stock closed on Friday at 1.19. 4) BCTX - Averaged long at 78.25 (2 mentions). Stock closed on Friday at 9.15. 5) GRPN - Shorted at 26.66. Stop loss at 27.89. Stock closed on Friday at 22.52. 6) TXN - Shorted at 81.37. Stop loss at 83.71. Stock closed on Friday at 80.66. 7) ORCL - Shorted at 303.90. Covered shorts at 305.25. Loss on the trade of $135 per 100 shares.
Previous Newsletters
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The opinions and commentaries by Mr. De Vito are not a recommendation to buy or sell, but rather
a charting guideline, based on his own knowledge and experience, regarding the stocks he is following or
that are brought to him by others. Mr. De Vito does not presently offer a track record of his trading experiences.
No inference of success and/or failure should be assumed. The
information enclosed above, regarding his background, length of trading, and experience, is correct
but is not meant to suggest, state, or infer any future success in trading, based on his opinions. The information herewith included should only be used by investors who are aware of the risk inherent in securities trading. Mr. De Vito accepts no liability whatsoever for any loss arising from any use of the information and/or comments he supplies. |
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