Weekly Blog 19 March 2021

The last several weeks underline why it is hard to make money trading shares in a sideways market. Sure, you can bag the odd prize if Lady Luck smiles on you, or by trading higher risk speculative stocks-  but that comes with some risk as many have found out in this market.

Importantly (for me) is that the XAO’s Friday candle fell right to the lower boundary of my price channel and rose to close near the candle’s middle – offering some hope that (once again) the worlds investors will mull things over this weekend and decide Friday was oversold so they need to buy on Monday.

XAO 19Mar21

Overall, my own trading was down 0.3% for the week which is at least better than the XAO’s 0.73% loss.

I had no major losses and two gains. CUV, which I bought 2 weeks ago, I topped up during last week and then sold for a 9.7% profit. CUV has the potential to go further but I’m expecting a bit of a retracement first. I bought into CFK and then topped it up. Sitting at $11.17 currently, I have a target of $12.40. CFK showed a 19% gain this week, but much of that was before my buy in and my trade is only up 8%. I also topped up SYD, OZL and WEB (all of which repaid me by subsequently falling back). Neither of these stocks made my Stocks to Watch last week because they only confirmed their likely jump in price this week.

I sold ORA when it hit its target but it fell hard and fast and while I made a profit it wasn’t as good as it could have been. I bought in 3 tranches as price rose and while the first 2 tranches were profitable the last was not.

I’ve left my last week’s Stocks to Watch unchanged. While many have moved down with the market they have all retained potential to rise. I was going to add ALG, SVL and BRN – all of which are building patterns that could see good rises (although BRN is quite a volatile stock and a relatively higher risk trade than the other two stocks). However, they all had some question marks hanging over them and in this market it is probably best to do nothing.

Gold has ticked up a bit this week, but I still see it more likely to fall a bit further yet. Using GOLD as a proxy for physical gold that EFT currently has a price of $208.90. I see the possibility of it falling to $200 or perhaps $195. Based on this I don’t believe gold stocks are quite ready to move up consistently.

GOLD 19Mar21

 

Weekly Blog 12 March 2021

Investors seem to be rebalancing their portfolios towards a greater exposure to boring old stocks like banks, oil etc which are doing well at the expense of what have been flavour of the month shares like BNPL, techs (even stocks like CSL). So again, whether you made money this week will depend on whether you have a balanced conservative portfolio, or one that is more speculative. That’s not to say all speculative stocks are bad – just less predictable in this volatile market.

My own trading, which is basically reliant on patterns hasn't shown my usual returns for the past couple of months while the XAO has been drifting sideways in a narrow trading range. This is (hopefully) just a passing phase as  I have found that when the going gets tough I need to just wait it out and trust in the charts.

I run a theoretical trading portfolio of 10 stocks which is balanced in that it covers a range of sectors. I did this for people who have bought my educational material and update it each week - so as to give experience in how to professionally manage an investment portfolio and show that you don't have to have very much charting knowledge to do so. The portfolio is based on a weekly chart and stocks are only assessed on the basis of whether to hold or fold each Friday.

While I'm only just better than break even in my own trading since Jan 1, since starting the theoretical portfolio 4 months ago it is up over 9%. Doesn't sound a lot, but it is an annualised return of close to 30%. I'd expect about 12% - 15% per annum so I won't be surprised if a few of those trades fall off their perch. However, it does show the value of a 'steady as you go' approach combined with a conservative portfolio. 

The XAO seems to be rising from the lower boundary of the price channel in the chart below and it would be good if it could go on to make a higher peak on the weekly chart. That could see price go back to the top boundary of the channel (around 7,350) and coincide with a very strong level of resistance from a larger price channel (not shown but range of upper boundary of that channel is shaded in red). I suspect that if this short rally comes to fruition then it could be followed by a correction of around 14% - although sometimes corrections get a life of their own and turn into bear markets.

By the way, the red sloping line follows the daily highs which have shown a strong bearish, consistent decline. The XAO needs to break this pattern as a first sign of the short rally I’ve pencilled in.

Gold moved up 0.45% for the week, although its chart remains very bearish and in a very strong downtrend.

While the XAO eked out a rise of 1% this week my own trading made 2.7% wiping out most of the losses of the past few weeks when my trades fell short of the market.

The only trades to fall were TRS and HM1 – both of which seem well placed to recover. SYD, CUV, WEB, SLR, SFR, OZL, ORA and FLT all rose by more than 6%. Some of these were new purchases while others were top ups this week so not all of the 6% flowed to me. I also topped up MQG and CSL. I sold 50% of my CSL holding a while ago due to their falling fortunes but bought back because they seem to be rising off a support level and a significant low and were up 2% for the week.

Stocks to Watch this week see an inclusion of HAS (bit speculative but an interesting chart) and (not surprisingly) travel stocks SYD, WEB and FLT. SLR also look as if it can make a run as does SGM if it can maintain its recent momentum. BLD has been removed after rising 7% this week and while it has further to rise, it is now too close to my target to represent risk reward value. Many stocks are showing promising moves but the market remains bearish and now is not a time for too many speculative punts.

XAO 12Mar21

Weekly Blog 5 March 2021

Another week I prefer to forget about. On days the market rose a little my trades slipped and on the days it fell they slipped further! No dramatic changes but enough to be disappointing. Your fortunes were probably dependent on what market sectors you favoured – while Financials rose by nearly 5%, Gold fell by 6% with Health not far behind at 4.5%.

The XAO after going nowhere for the week (down 0.03%) is still clinging to the lower boundary of a long-standing price channel. While the week’s low fell out of the channel it rose to close right on the boundary, meaning the body of the candle this week stayed in the channel. The fact it closed near its mid-point is positive and offers hope of some recovery next week. I still feel another rally is on the cards before the market sees another correction.

XAO 5Mar21 

I sold out (or down) some small holding in non-performing trade as their price fell – PLS, MVP, PAR, CIM, MSB, FPH, DOW and WPL. PLS looks like it may be trying to move up having made a reversal candle this week and DOW moved up later in the day I sold. FPH, DOW, PAR and CIM will remain on my watchlist for potential rebuys if/when the market recovers.

I bought COH and SGM this week and both subsequently fell a little.

My best performers for the week were SGM (5.4%) and OSH (+4.2%) – although SGM was purchased during the week after much of that rise. TRS (down 6%) was the only stand out loss. I’ve persevered with TRS because its chart suggests this week was (should be) its low and as it made a strong reversal candle, a long-legged doji (you’ve got to love the names!) I’ll be interested to see where price goes next week.

Given the volatility of the market and many shares having fallen back this week I can’t see any new stocks to add to my Stocks to Watch page. I can see many I think look like they are working on a price recovery, but their price patterns are less than certain. Of last weeks list I’ve deleted ABC and NCM which have both moved significantly lower. Some others that moved lower for the week, like WGN and TRS moved up on Friday to make reversal candles. Others that moved lower still show potential to change trend.

Gold which is traditionally a safe haven in difficult times shows no signs of stopping its 8th month of falls, losing nearly 25% of its value.

Weekly Blog 26 February 2021

Another initially OK week brought to its knees by a big fall on Friday. Price has dropped out of a price channel I saw several weeks ago in the chart of the XAO, but I now think that price channel’s lower boundary was incorrect – see my XAO analysis for the detail and where I see price heading from here.

My trades lost 2% this week thanks to Friday’s rout. The number of trades that lost ground was only a little more than those that gained but I did see some significant moves – TRS (-12%), FPH (-10.8%) and RWC (-8.9%). On the other side of the ledger ABC rose 11% and WGN 7.4%.

I sold some of my MVP trade as it hadn’t turned around as hoped (although of course it seems to be doing so since I sold –which is always the way!). I also sold the last of my MYX as it has continued to disappoint. ECX was closed out for a small profit after peaking exactly on target. Unfortunately, its price fell back strongly and I missed exiting at the top.

I topped up OSH and WGN and bought FLT, WEB, HLS, PLS and ORA but, alas, all ended the week in the red.

The hypothetical long-term trade portfolio I’m running for those who have bought my educational material rose 2% for the week – so at least that was one bright spot in an otherwise less than positive environment.

A number of my Stocks to Watch fell off their perch in line with the general market. Given concerns about the market’s future direction 6 of last weeks picks have been removed as being now less likely to perform. I have added 5 new stocks which have been building potential patterns that have held up better in face of Friday’s negative market sentiment.

As my XAO analysis says, I’m expecting higher prices next week and reading Saturdays Age there seems to be a lot of positive sentiment about potential for travel to resume and the economy in general looking up. Hopefully, that positive sentiment will bring the buyers out of their bunker next week.

Weekly Blog 19 February 2021

The XAO started last week strongly only to roll over mid-week and by Friday fall back to trend. Price remains rangebound (as it has since November last year) and while this can’t continue forever, at this time there is no sign price is planning to move out of the channel it seems to be stuck in. And as long as it stays rangebound while there will still be winners and losers most share portfolios will do little more than track sideways.

XAO 19Feb21

There were the usual surprises from Reporting Season. Some low life shorters told the market NEA were cooking the books, however, their play was scotched by a NEA release which several fund managers backed up. NEA closed up 21.3% for the week and as I have been holding NEA for a short time I took profit and closed out my trade.

My other trades were a mixed bag with nothing remarkable to report – LTR fell 10% and COH rose 7.4% (and of course NEA was a win). During the week I sold LYC, NEA and COH to take profit. LTR, OBL and BPT were sold as non-performing trades. I also bought ECX, RWC, ORA and HLS today  - see my Stocks to Watch for detail.

My trading was up 1.5% for the week, so better than the market, and while in positive territory for the year I am still trailing the XAO's 3.1% gain for the year to date.

My hypothetical long-term trading portfolio being run for those who have purchased my educational material picked up 1.3% this week and is up 2.3% for the year - again in line with the overall market performance.

Here's hoping the market finds some direction next week.

 

 

 

Weekly Blog 12 February 2021

Very little to report this week. The XAO fell back a little (0.4%) and there is little indication which way price will move next week. As it has generally been alternating between higher and lower prices, the ‘flip of the coin’ probability suggests a better result next week.

My own trading has been frustrating with CIM dropping 20% on a profit release that failed to meet expectations (an overreaction? Time will tell). NEA fell 12% after a short attack which several analysts have refuted today (and hopefully price will recover Monday). LTR rose 11% and VOC I sold after it jumped 18% leaving me up 50% on a 5 month trade). Overall I was down 1.4% for the week.

Given the lack of an obvious market direction there are few stand out trading opportunities that I feel are worth including in my Stocks to Watch (although I reinstated CHN as it again looks to have promise). None of the existing listings have been deleted.

Weekly Blog 5 February 2021

Down one week, up the next. Last week's range of 350 points for the XAO was the largest since April last year. Interestingly, the XAO has had the same high for each of the past 3 weeks and something has to give soon – I’m leaning a bit more towards higher prices than I was last week. The coming week could decide the future short-term direction of the market.

The XAO was up 3.2% for the week which was exactly the same outcome as my own portfolio. A theoretical trading portfolio I am running for purchasers of my educational material also showed a 3.7% gain. This portfolio is designed to show budding chartists how to deal with what I call the ‘hold or fold’ decision when prices start to fall. To show why hard stop losses can be problematic and that those issues can be mitigated by relatively simple charting techniques, there is a video I posted yesterday that might be of general interest. This arose from both BPT and ABC breaking stop losses a week ago to trigger a sale last Monday, but going on to recover with rises of 10% and 12% respectively.

This week I bought NEA and topped up BSX and SIQ. My largest gainer was PAR (+20.4%) followed by BSX (14.6%), NEA (14% although I didn’t hold for all that rise), ABC (11.5%) and SIQ (10.3%). Three stock fell but not by meaningful amounts.

With my Stocks to Watch I deleted DOW because it made a lower low and included BLD, ECX, NEA and VOC.

For the gold followers, the precious metal slipped another 1.9% last week but is at a strong level of support which could see a reversal of its fortunes. That said, it remains in a formal downtrend, making lower peaks and troughs.

Weekly Blog 29 January 2021

The roller coaster ride continued this week, ending on Friday with the wheels falling off! Not everything moved lower, but there were some big falls on some popular trading stocks (PLS down 19%, GXY 16%, ORE 15%, LYC 14%, BPT 12% with the energy sector taking a general hit).

The XAO fell 2.9% to close below the narrow price channel it has traded in over the last 10 weeks. This week’s candle is a bearish engulfing candle which could mean more falls next week. The XAO chart suggests price could drift lower over several weeks to the 6750 to 6800 range – a fall of 5% from last Monday’s high. The is no apparent support between Friday’s close (6871) and 6750.

I don’t see the sky falling in just yet, but it is a time to be conservative and watch one’s stop losses.

My own portfolio also suffered with BID, BPT, LYC and WTC also sold for small losses to protect capital as the stock's outlook was negative.

I purchased LTR, NEA and BSX earlier in the week but none of these moved up against the overall downward pressure of the general market. In fact, my entire portfolio, with the exception of SIQ, fell with the largest loser being CHN (-16%). BPT, OSH, MYX and MVP were all down between 8% and 10%. The overall decline in my portfolio this week was 4.9%.

Continuing the negative theme, most of the listings on my Stocks to Watch page last week have been removed, having experienced strong falls. That’s not to say they won’t turn around next week, but right now, with the market potentially soft, their immediate outlook is unsure. Several highly traded stocks have fallen back to the lower boundary of their price channels and (assuming the price channels are valid) they now have a good chance of moving up. However, they are all high risk and need to evidence a change of trend over the next few weeks, and to buy now could be a case of ‘catching a falling knife’. EMV, NCM, PNV and SLR all fall into this category. TRS I mentioned a few weeks ago because it looked as if it was breaking up out of a pennant pattern. That pattern failed and price fell back but it now looks like the pattern may have been a flag (rectangular) or possibly even a Wyckoff pattern and price may move up strongly.

Monthly update of New Years Stock Picks

On 1 January I picked 11 stocks I saw as having potential to rise this year. One month on the results are a mixed bag with roughly equal numbers of rises and falls. The overall result has been a fall of about 0.8%. WPL was the largest riser (up 7.6%) while BPT was the biggest loser (down 8.9%). You can find the picks listed on my Stocks to Watch page or click HERE

Contact

Robert Norman

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

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