Weekly Blog 11 September 2020

With the XAO down 1.1% for the week it has now fallen for 3 weeks in a row with the last 2 of those closing below an uptrend line – which is a formal sell signal. If the XAO falls below 5,992 then it will have made a lower weekly trough and if this is followed by a lower peak, it is starting to look like a more sustained rout might be on the horizon. A fall to 6,000 or even 5,400 is possible, but as said previously my favoured view is that prices will push up to 6,800 or 7,200. Perhaps the road map ahead is a pull back and then a move up – but it's not a time to panic.

This week I bought TCL, perhaps a little prematurely because, despite losing some ground this week it has made two consecutive closes above a weekly downtrend – which is a buy signal. I also bought CSR which I commented on last week and my trade remains in profit (but only just) in spite of an adverse week.

I sold RED for a small profit as it hadn’t performed as hoped.

A few stocks I am watching are building potential tradeable patterns. Long-term trade potentials are WOR, OZL and ORI, while short-term trades might come from the likes of NUH, COH, BLD & SGM.

Weekly Blog 4 September 2020

This was a roller coaster week – 3 days down followed by 2 days to climb back to exactly where the week started - only for things to fall off a cliff on Friday when the XAO fell back to almost precisely (but importantly, not below) Wednesday’s low. Price is sitting on the lower boundary of a price channel that’s been holding since 15 June. If prices keep heading lower next week and break out of the channel, I’d expect it could fall back to 5,832 (8% off last week’s high) which would almost be a technical correction (10% decline).

This week I sold BHP after it fell back 6% and broke my stop loss. My trade was about break even but having sold when the stock went ex-dividend, I made a small profit (including the dividend) of about 2.2%.

I also sold AGL when it broke my stop loss. It had a drop of over 11% on an release that failed to impress the market, recovered a little and then fell lower to make a new 5 years low. The trade never fired so it never advanced beyond the original tranche meaning my exposure was small (I initially buy about one third of my planned total purchase and then top that up as price moves up).

I bought SXY during the week (see last week’s blog and my stock commentary page) and after today’s stumble by the market I’m still in profit – so hopefully next week will see SXY move up.

I’ve seen a number of promising trades building through the week but with today’s decline possibly predicting more falls next week, now is perhaps not the time to buy. That said, one that did catch my eye was CSR. I backtested CSR this week to determine some long-term trading rules and it really showed a great result with 5 positive and no losing trades from 2015 to date. The overall return was 221% based on the simplified trendline trading technique outlined in my educational material. The backtest also confirmed a new trade could have been entered in April and as price is currently not far in front of where it was back in April, I may buy in next week (assuming market Armageddon doesn’t seem to be happening!). The backtest will be on my video stock commentary soon – check it out. CSR was one of only a few stocks to rise today - that has to be another positive.

Weekly Blog 28 August 2020

The XAO did manage to move up a little this week, 6300 remains a line in the sand that XAO can’t get over. As it has made a higher low followed by a higher high, maybe next week with see a break higher and my target of 6,800 become more likely. The alternative view, and possibly the most likely, after the last two weeks have made doji which are reversal candles. While, a fall next week (or next couple of weeks) back to 5800 is quite plausible, my preferred option is a break higher as I can’t see what the catalyst would be that sent the market lower. Perhaps Trump will throw a few more rocks at China’s windows!

 There have been some big rises and falls on the ASX 300 this week, with SPL the standout achiever up 38% and WHC the biggest loser - down 27%

There are a number of interesting trade opportunities on the radar this week and I bought VOC, M7T and PME – all of which I flagged as potential trades in last week’s blog. I also bought back into EOS and FPH having sold out of successful trades recently. BHP and SPK were existing trades that I topped up after their price moved up.

On the negative side of the ledger I sold out of trades in IPH and IPL both for losses (12% and 7% respectively) after their price broke stop losses. I usually buy my shares in 3 tranches as explained in my educational material and neither stock had moved up so both were a minimal holding.

What do I like this week? The stocks below have apparent entries for trades and while there are many other potential opportunities, I’ve only looked at stocks on my extended watch list.

SXY has a potential 11% gain based on a resistance break pattern. SXY is a tricky beast to trade and often doesn’t do what is expected.

PPS is a classic Trendline Trading Technique entry – closed above a downtrend and making higher lows and highs. The only negative apparent to me is that price could fall into Elliott Wave 2 and head back towards the $0.30 area. I need to post a video of a backtest.

XAO 27Aug2020

Weekly Blog 21 August 2020

The XAO has ever so slowly inched higher over the past 12 weeks while it has traded in a range between resistance and support levels of 5800 to 6300. This week it made a new high for that period and as such has the potential to move up to 6800. This week’s candle was a doji which suggests indecision in the market, something that might see prices fall back next week. Some positive news on the virus front might be necessary to see prices rally, but higher prices next week are not out of the question either.

On the trading front last week was a good one with BAP, COH and WTC closed out for acceptable profits. BXB was the only purchase for the week.

Last week I said PPS and ORI were looking like potential trades. PPS has moved up to $0.545 and effectively achieved the target of $0.555. The jury is still out on ORI after it initially moved higher only to fall back a little and make a Harami candle – which does hold out hope of a rise next week.

Stocks of interest this week are VOC, PME & EOS

Weekly Blog

The XAO has continued its sideways drift of 10 weeks and shows little conviction. However, if it can break and close above 6320 with some volume a target of 6800 is quite likely. With the ASX reporting in full swing and Covid19 still lurking in the background, a move up probably will require some positive news on one or both of those fronts.

The week provided me with a wild ride on a trade in MSB which I closed out for and 11% profit. I also bought AWC and details of both trades can be seen in Stock Commentary.

Starting this week I thought I’d also identify a couple of stocks which show potential to be profitable trades. PPS and ORI, are analysed in Stock Commentary. Note that my analysis is provided purely for educational purposes and should not be construed as advice to deal in any particular stock.


XAO 16Aug2020

Weekly Blog

The market continued to underwhelm this week with the XAO not trading outside of a 3.2% range since the start of June. With reporting season kicking off the market may be waiting for some good news after having factored in gloom and doom from Covid19. Some positive results from Victoria’s lockdown might also encourage some buying.

This week saw no trades closed out but a buy into PLS.

Weekly Blog

This week the XAO continued its tight range-bound sideways action that has seen it little changed for 8 weeks. Price has formed a possible price channel where this week’s low of Friday is sitting right on the lower boundary. It will be interesting to see if price falls down out of that channel next week to form a correction (~10% fall). My suspicion is that prices will rise again next week to continue the sideways action. That would probably see the run of higher peaks and troughs continue and price ultimately break higher. In short – no clear picture where price will head when the sideways action stops.

No buys this week given the unsettled market, however, NCM was sold for a profit (Click on stock to see details).

Weekly Blog

The XAO still refuses to move either way, opening and closing at the same level  this week – making a doji right on the lower boundary of a long term price channel. The doji could signal a reversal in price next week, something that could see the XAO break down out of that channel for the first time since April. This doesn’t mean further falls are ahead because (a) it might not break lower, and (b) if it does it may recover quickly and move back up towards the upper price channel boundary around 7000/7200. The market is looking for some good news on the virus front and as long as infections remain high it is hard to see investors pushing prices higher.

No buys this week in light of the potential for the market to retrace, although a number of potential opportunities were passed over.

FMG was sold for a profit after only being purchased last week. Click on company name for details.



Robert Norman

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

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