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The market is still stuck on ‘repeat’ with no move up or down out of its narrow trading range which saw the XAO close flat for the week (+0.02%). Price has been forming a pennant pattern over the past 2 months and my hope is that price is about to break up out of said pennant. If price breaks above 7110 next week the pennant will be formally confirmed and assuming price closes above last week’s close of 7064, then a break higher becomes more likely than not. Thursday’s candle closed near its high and Wall Street was up along with ASX futures – hopefully setting the scene for a positive start to next week.

Whether you ended in the black or red this week again will have depended on the sectors your portfolio is biased towards and whether it leans towards speculative stock or is more balanced and conservative. As an example, my own holdings were down about 1.5% for the week but the educational balanced portfolio I run as a ‘how to trade’ for students of my material rose by 1.1%.

I sold 50% of my FLT trade during the week as it hadn’t fired as hoped (and showed a potential to fall further). I only sold 50% because I can still see reasons why price could reverse and go higher. I also quit my HLS trade for a lack of performance. Both disposals were break even.

Last week I noted I had bought back a small amount of MYX, being a stock I lost money on earlier in the year. While I have misgivings about buying back into dud trades (because I’m probably just trying to prove I can recover said loss) MYX did spike, jumping 21.4% yesterday. I sold despite the potential for further rises as that jump exceeded my expectations. If it breaks $0.45 it could be worth another flutter.

Despite having seen a few other good patterns I’ve been moving to a less speculative position and am preferring to top up existing trades that are performing, rather than take on new trades that have potential. While my portfolio fell more than the general market, those that did drag my performance down generally seemed to be falling to support levels they could be expected to rise from, and (importantly) none were in danger of breaking stop losses. My trades in travel stocks FLT and WEB moved down, probably due to the Queensland Covid issue. My other travel play, SYD, rose 1.9%, suggesting this sector may still have some potential. WEB fell 7.9% for the week after also making a large convertible notes issue. The debt is convertible to shares at a 22% premium so I’m unsure why that should have had such a negative impact on price. CKF which I decided to hold after it achieved a short term target fell back 6.6% this week to give away most of those gains. In line with my move to de-risk my portfolio I have stuck with CKF because I feel it is just setting itself up for another rally from a level near this week’s lows. The week saw a reversal candle form, suggesting a change of trend is likely – so hopefully next week will see some recovery by CKF. SGM (up 5.5%) and TCL (up 4.2%) were my best performers – other than MYX.

The sluggish market has presented me with a problem in respect of my Stocks to Watch. Rather than (usually) moving after a week or two, my picks more often than not remain glued to the launch pad or fall back. While I expect most of those picks to live up to their promise in time, I’ve decided to revert to only listing stocks I see as having strong charting potential at the time of writing.

Contact

Robert Norman

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

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