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It at least seems the fall into the end of January was a correction and unlikely to continue to grow into a bear market – although that still remains a possibility should the rise over the last 2 weeks prove to be a Dead Cat Bounce. I remain optimistic the recovery will continue, but wouldn’t be surprised to see lower prices this week before a continued move up. Geopolitical issues and concerns over inflation will probably keep the market jittery. Profit reporting season is also getting under way and any companies not meeting investors expectations in the market are likely to pay a heavy price.

The XAO is making an interesting pattern. I recently said I saw the potential for a Wyckoff Pattern building in the XAO. This would suggest price would rise from the recent low back above the lower boundary of the rectangle on the chart below and then fall back to retest that boundary – and that’s what it has done. Wyckoff Theory suggests that assuming price bounces up off that lower boundary then it should make generally higher peaks and troughs for some time. We’ll see!! In this market, a period of generally consistent growth seems unlikely in the short-term.

XAO 11Feb22

Most of my Stocks to Watch rose last week with ILU and TRS both up by about 7%. While some other stocks are possibly showing greater potential than my listed stocks, those already on my Stocks to Watch still have the possibility of fulfilling their patterns and running higher. As such I don’t see any reason to change this list.

Having been off doing other things, I wasn’t able to produce a blog last week. This week, while the Stocks to Watch haven’t changed, I have reviewed and updated each stock’s analysis – which can be found by clicking on the links in the Stocks to Watch page.

In respect of my own trading, I closed out most trades during the recent correction as stop losses were broken. I kept FLT and have since topped that trade up. I have also bought back into PDN and MQG and subsequently topped both trades up. JLG, BPT, TLX, NCM, ADO and FMG have also been buys. Last week saw a profit of 1.7% in my trades and my educational long-term portfolio made 1.5% while the XAO rose 1.3%


Robert Norman

Phone: 0428 346 951

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