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This week saw the XAO make a new high last seen almost a year ago. Importantly, this break higher closed above a resistance level, suggesting prices could keep moving up to 7,200 in the short-term.

The increase in price has not been equally distributed across all markets and sectors. My own trades usually show a better outcome than the XAO but since January 1 they have slipped back 1.1% while the XAO has increased 2.5%. While disappointing, trading has moments like this and in my experience you need to trust your analysis and not panic – or sell non-performing trades just to buy something else because ‘the grass is greener on the other side’.

Worst performers for me were MVP (-5.5%), ALU (-8.1%) and PAR (-5.5%). Bright spots did exist with LTR sold for a 13% gain. I jumped out of LTR too early when I saw signs of its rise appearing to falter, but it recovered and went on to increase another 15%.

I sold 50% of my trades in CSL and COH this week as these stocks have both broken below stop losses. I didn’t sell the entire holding because both were at a strong level of support and while they broke below said levels during the week, they subsequently rose to close at or above those support levels. I will rebuy both if they prove they are moving to an uptrend.

During the week I bought OSH, BPT, LYC and OBL

While my own trades are being somewhat recalcitrant, I’m running a hypothetical portfolio of 10 long-term holds for anyone who subscribes to my educational material. That portfolio rose about 2.5% since January 1. My Stocks to Watch last week included 16 stocks of which half rose but by much more than those that fell, with an average overall gain of 4%.

I also listed a portfolio of New Year’s picks on my Stocks to Watch page last week which I’ll review every month to see how they perform.

I’ve removed 7 of the Stocks to Watch on my last bulletin. Two showed significant moves up to near target and no longer represent value for money. The other 5 show price reversals that may only be support retests, but their overhead targets are now less certain of being achieved. Five new stocks have been added but there are many more that show potential - which may augur well for next week.

Contact

Robert Norman

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

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