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The XAO did manage to move up a little this week, 6300 remains a line in the sand that XAO can’t get over. As it has made a higher low followed by a higher high, maybe next week with see a break higher and my target of 6,800 become more likely. The alternative view, and possibly the most likely, after the last two weeks have made doji which are reversal candles. While, a fall next week (or next couple of weeks) back to 5800 is quite plausible, my preferred option is a break higher as I can’t see what the catalyst would be that sent the market lower. Perhaps Trump will throw a few more rocks at China’s windows!

 There have been some big rises and falls on the ASX 300 this week, with SPL the standout achiever up 38% and WHC the biggest loser - down 27%

There are a number of interesting trade opportunities on the radar this week and I bought VOC, M7T and PME – all of which I flagged as potential trades in last week’s blog. I also bought back into EOS and FPH having sold out of successful trades recently. BHP and SPK were existing trades that I topped up after their price moved up.

On the negative side of the ledger I sold out of trades in IPH and IPL both for losses (12% and 7% respectively) after their price broke stop losses. I usually buy my shares in 3 tranches as explained in my educational material and neither stock had moved up so both were a minimal holding.

What do I like this week? The stocks below have apparent entries for trades and while there are many other potential opportunities, I’ve only looked at stocks on my extended watch list.

SXY has a potential 11% gain based on a resistance break pattern. SXY is a tricky beast to trade and often doesn’t do what is expected.

PPS is a classic Trendline Trading Technique entry – closed above a downtrend and making higher lows and highs. The only negative apparent to me is that price could fall into Elliott Wave 2 and head back towards the $0.30 area. I need to post a video of a backtest.

XAO 27Aug2020


Robert Norman

Phone: 0428 346 951

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