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With no sign of the annual Santa Rally (a Covid cancellation by the reindeer?) it looks like investors will need to be content with the strong November lift in prices as compensation.

The XAO reached the magic 7,000 level this week but closed lower. The chart still suggests higher prices of around 7,200 to 7,400 are likely before our next material retracement. With the upcoming reporting season likely to be depressed by the Covid recession, perhaps this could be a time for our next pullback?

While the XAO managed a rise of 0.55% for the week, it was a mixed bag which saw large falls such as A2M down 22% on China worries. Despite the trade spat with China, the resource sector gained 0.23% - driven largely by gains in iron ore and gold (the latter rising by 5%). 

My own trading was break even this week with the only noteworthy event being MSB falling 47% on a cancelled drug trial. I sold almost all my holding in MSB weeks ago but kept a (fortunately) very small exposure in case they ‘kicked a goal’. Unfortunately it was an ‘own goal’. With little to lose I’ll see if the price rallies from the new lows, but I’m not hopeful.

PME which had been drifting lower to lose 15% of its value has turned up after reaching the bottom of its price channel. Price rose 8.5% for the week.

To free up some capital and protect profits I sold EOS and STO as well as 50% of my holdings in VOC this week. I see the possibility of further falls ahead before these stocks turn up again.

There were no buys last week as my capital was largely committed, however had that not been the case I would have taken a position in at least one (if not all) of ABR, MLX and MLD which I added to last week's Stocks to Watch page. They rose by 20.2%, 19.1% and 8.4% respectively - so not happy, Jan! (do you know that saying was coined by a 2000 Yellow Pages commercial?).

Stocks to Watch has had 3 stocks deleted and 4 added (WTC, NXT, NEA, PME). While there are certainly more potential trades out there, these 4 stood out as having strong potential.

A Merry Xmas to all and hopefully a few green days to finish off the year.

Contact

Robert Norman

Phone: 0428 346 951
Email: robert@sharecharting.com.au

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