Despite all the uncertainty and volatility right now, I’m not panicking.I’m not switching gears or adjusting anything about my strategy.I’ve simply kept doing what I’ve been doing all year…And that’s trusting the charts.Watching price movements and key levels, then applying them to my unique strategies.My Profit Radar… the Earnings Calendar… and my Pure Income method of generating income from the options markets.Sticking to my guns like this has helped me navigate dozens of periods just like today, and I’ve always come out on top.If I had to boil it down to a single piece of guidance, it would be this:Watch the key trends.And one sector of the market is going through a major trend shift right now: commodities. Thanks to rising inflation, now made worse by the Russian invasion of Ukraine, commodities are a bright spot in the market.That’s why the stock we’re looking at today is a gold miner you can’t ignore — Wheaton Precious Metals (WPM).
A Perfect Environment for Gold
Wheaton, based in Canada, primarily mines gold and silver.Miners like Wheaton tend to move in the same direction of the commodities they mine. So, however gold goes, WPM is not far behind.And right now, gold is in the perfect environment to rise. Namely because it’s one of the top safe haven assets in the market.Just think about the Russian Ruble. It’s cratered over 35% since the country invaded Ukraine. But gold, an asset that has backed currencies for hundreds of years, is up 2%.This proves that investors need to put cash to work in precious metals, even if you don’t think your country is set to implode.Gold is still showing us that it’s the best store of value in the world. And this simple fact will help drive miners like Wheaton Precious Metals higher.We’re already seeing it in the stock price.WPM was up 17% in the month of February, while the S&P 500 was down 3%.On the chart, the most recent bars are shaded green. That’s from my Profit Radar, which tells me this stock is leading the S&P 500.But more importantly, WPM is breaking out of a multi-year wedge pattern. Take a look:
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The red resistance and green support levels started after the pandemic in 2020, converging ever since. Going back to October of last year, this range tightened and the stock has been bouncing around just waiting for a surge higher.The war between Ukraine and Russia helped tip the scales.
On top of this breakout, we’re seeing commodities rally across the board, as Russia’s invasion in Ukraine is sure to heat up an inflation number that’s already on fire.And gold miners, like WPM, are set to see even bigger moves higher.That’s why WPM is on my Bank It list today.You can bet on a short-term pop with call options in the weeks ahead. That’s playing the initial breakout that could take the stock back to the $50s in no time.But also look for a longer-term uptrend in the stock as gold continues a steady climb higher.Regards,
P.S. We’re gearing up for a brand-new Quick Takes LIVE next Thursday, March 10.So be ready to join me live at 11 a.m. We’ll walk through charts, my Profit Radar, and any unusual options activity we spot on any stock you request in our live chat.If you missed last month’s Quick Takes LIVE, catch up right here.And be sure to subscribe to the True Options Masters YouTube channel to get notified when we go live.
Chart of the Day:Another Commodity to Add to Your Watchlist
By Mike Merson, Managing Editor, True Options Masters
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A couple weeks back, I shared a long-term look at the Global X Uranium ETF (URA).I pointed out that it’s had a devastating decade, ever since the Fukushima nuclear disaster in Japan.But recently, uranium is on the upswing. And if you’d followed my guidance and taken a position in URA on weakness back then, you’d be up almost 21% today.Not bad, if I do say so myself…Even better, the short-term action points to more gains in URA ahead.Note the divergence between the price action and the momentum indicators. Both the RSI and MACD are making lower lows while the price makes higher lows. This is a rare type of divergence called a “hidden” bullish divergence. It essentially means we’re seeing higher price action, without getting into the overbought conditions that tend to precede downswings.If you aren’t already in the URA trade, this isn’t a bad spot to get into it. I think this is a long-term trend in the making, similar to how Chad feels about gold.Regards,
