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The XAO closed 2.1% lower for the week after falling to my previously suggested support near 7480. It then recovered most of those losses to climb back to 7630 on Thursday -  only to give away all those gains to close back at support at 7457. I see 7480 probably holding and prices rallying for a few days next week, perhaps even breaking up out of the regime of lower peaks and troughs we have been seeing on the weekly chart. However, that could just be wishful thinking on my part as Friday’s candle was a strong bearish candle, although it didn’t close on its low. In short, there are charting arguments for both rises and falls from Friday’s close.

I was struck by the strength of BPT’s chart last week and bought in to get a slice of its 19% gain for the week. It has fallen back a little on Friday, but I’m continuing to hold for now.

BPT was one of several stocks I identified last week as potential trades based on a break above downtrend. Despite the general market pullback, most of those stocks finished in positive territory for the week (see the table below) -.

DT break Sept24

My trades in LYC, NMT and MP1 were all down between 6% and 9% for the week and my overall result was in line with the XAO. LYC and NMT have both fallen back to trend from where they should move up again, (unless the XAO fails to hold at 7480). MP1 has broken below trend while making a sideways pattern in a tight range for 10 weeks. This type of sideways consolidation pattern usually (but not always) breaks higher and for now I’ll see how this plays out – despite the break below trend. A break below that pattern would see the trade needing to be closed out.

My theoretical medium term trading portfolio has seen 4 of its 10 stocks break trend and sold, but it is still up 16.5% for 10 months and despite those sales (which are made based on a strict trading plan) the portfolio only fell 1% last week.

My Stocks to Watch are really just a theoretical exercise in this market, but XRO and WES have been removed as their price moved back. I’ve added SXY which has broken above resistance.

Good luck for the coming week.

Contact

Robert Norman

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

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