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Last week I said a break above 7,725 might signify higher prices but the week’s short rally ran out of puff right at that level with the last 3 days closing within a point of each other around 7,727. The last 2 day’s candles were doji’s which signify market indecision and are often precursors to a change in trend – so next week could see prices fall back again. Price momentum is tracking nicely along the solid black line I put on the chart a few weeks ago as an indication of where I thought price could head because it has risen with the same angle (momentum) on 3 recent occasions. If history repeats it suggests the probability prices might keep running higher along that line to around 8,300. With that in mind (and doji aside) it could just be a case of price  consolidating at the 7,725 resistance before another push higher. We need to see a confident break above resistance to support that argument.

XAO 22Oct21

The XAO rose 0.8% and my own holdings were tracking along that path as well with most trades moving up, but my overall performance (and let’s face it, that’s all that counts) took a hit because the CEO of IFM stepped down and price fell 15% as a result. IFM has recovered about 3% from its lows and for now I’ll hold to see where it goes. LYC also took a hit on Friday, falling 8% on a performance release (but only losing 1.6% for the week).  I wouldn’t be surprised if LYC fell to around $6.25 before again rallying. Price is at support so my (optimistic) outlook is that price will recover next week (LYC can be a little volatile) and break above $7.80.

The only other significant moves in my portfolio this week were ADO (up 8.7%) and NMT (down 8.0%).

My educational trading portfolio was up 1.1% for the week and 20% for the last 11 months.

Financial and consumer discretionary sectors were big drivers of the market moving up this week, while energy and resources dragging it down.

My Stocks to Watch had a few bright lights with TRS, REA and AIA all up over 4% and no significant falls amongst the other picks. CIM, BFG and SGM all show positive signs of rises in the short term and the latter two have been included in this week’s Stocks to Watch (CIM missed the cut because last week’s candle suggests more sideways action is possible before it moves up). While CIM and BFG may take a while to play out, SGM is more of a trading stock where a short/medium term gain of 35% is possible if price moves back to the upper boundary of its price channel as it has previously.

I’ll give TLS, which I removed from Stocks to Watch last week, a mentioned – simply because I was looking at it today. It continued to show signs of weakness and closed for 2 consecutive weeks below its uptrend to make a strong sell signal. On the positive side price has fallen to support which is also the lower boundary of a price channel. I’m banking (literally, being a holder) that price will reverse next week to make another try at the $4.00 level which has proved to be an impenetrable barrier for more than 4 years.

Happy trading.

Contact

Robert Norman

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

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