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The XAO has been making a sideways pattern since the middle of June and it is the type of pattern that should see price break up out of said pattern (bearing mind these patterns can also equally predict falls), then I would expect a modest rally to around 7,830. Thursday I was confident that move up would eventuate. However, NSW’s Covid outbreak seems to be the reason the market fell on Friday leaving me (and most other traders/investors, I assume) in the red for the week.

Price did close off its lows for the week and the US had a positive session Friday night – so hopefully a recovery might be on the cards for Monday. But, until NSW’s Covid situation stops growing I see the market being depressed.

My own trading was down by 2% for the week, mainly with CUV falling by 10% and SGM and PTM both retracing 5%. No stocks broke stop losses requiring them to be closed out.

I bought into LYC during the week after it broke up out of a pattern suggesting further rises ahead. LYC was my only stock to end the week in the green. While I’m not a BNPL fan, Z1P also made a pattern suggesting it would go higher. however, it took a hit from Friday’s fall and that outlook is a little less rosy as a result.

Needless to say, most of my Stocks to Watch didn’t perform in this week’s depressed market.  VUL was the exception, rising 4.3%. I’ve not removed any of last week’s listing because while the short term outlook is now less certain for a number of these, the potential to perform remains. LYC has been included for the reasons outlined above along with BOQ which, despite falling this week, could see gains of up to 20% in the short term – if it can break above overhead resistance.

Contact

Robert Norman

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

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