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While numerous issues exist that could see the market fall further, I feel we’ve seen the worst of it and recovery, albeit bedevilled by volatility, is likely to remain the story for some time.

For the past 7 weeks the XAO has opened and closed in a range of about 3.3% bounded by 7500 to 7250.

For the XAO a confident close above 7,650 would be needed to make a higher trough followed by a higher peak on the weekly chart to signify a buy signal, and probable higher prices head.

There are some potential buys in the materials sector and while I’ve largely ignored these given the tricky market conditions over the last few weeks, I have now reviewed my Stocks to Watch listings.

While the listed stocks have been up and down over the past few weeks I have felt they had all retained potential to move up and last week most made significant gains – PDN (up 18%) and JGL (8%). FLT which fell away on problems in Ukraine made a 4% recovery this week. However, with airlines facing significant fuel price increases that will be factored into travel prices, the sector probably remains challenged.

I’ve removed FLT because of the above reasons, also gone are TRS (quite likely to rise from current prices but has really gone nowhere in 12 months), TLS (has fallen down out of its price channel for now), MQG (also fallen below support of long-standing price channel), and finally ILU (because it recently almost achieved a target I had for it, before falling away). Would I sell any of those delisted stocks if I was holding them – TLS, yes, and I’d be closely watching MQG and TRS, but the others, no.

I identified the following likey additions to my Stocks to Watch list - LKE (up 30% last week but potential for another 25%), TNE, PLS (coming of a price channel low that has turned price several times previously), BRB (coming off price channel low), ASM (closed above a weekly downtrend for 2 consecutive weeks – a strong buy signal), SLR (broken above significant resistance level that suggests a potential rise back above $2.70), RRL (broken above long-term downtrend, significant low, and price channel lower boundary), CXO (mentioned last week and rose 14% with probably more fuel in the tank), and finally COH (possibly starting new rally from a significant low).

The above stocks, if listed, would have seen the list grow to 13 and as I keep it to a maximum of 10, I have left out ASM, COH and CXO for a variety of reasons. 

Contact

Robert Norman

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

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