Day Trader column for April 13 - 2018

 

Our market was looking good to move up as of Friday last week and that came to pass on Monday and Tuesday this week, but there was a divergence between the ASX/S&P 200 and the SPI futures contract on Tuesday when the ASX/S&P 200 traded higher than Monday’s high and the SPI did not, indicating a move to the downside to come.    Wednesday this promise was fulfilled when the market retraced a bit over half Tuesday’s gains.    It now remains to be seen if the fall continues.    It is also worth noting that the move up over the past week came to a halt right on the downtrend line formed since January.     A break of this downtrend would likely lead to a continuation of the move up.    So it is now decision time for the market; does it continue up or build on the divergence and continue down.    We may know the answer to this by the time the market closes today.

As an aside, it was interesting to note our market has lead the Dow Jones since last Friday.    When our market was up on the day the Dow moved up in the next trading session, and when our market was down on Wednesday the Dow followed.

In the meantime our portfolio was hit again last week and three stocks were stopped out.

Australian Mines (AUZ) closed below its stop on April 09 and was sold the next day at 8.7c for a total of $23,370 after brokerage.  It did form a daily pivot point to the upside on Wednesday after testing the next support at 8c on Tuesday, so it now remains to be seen if 8c will stop the decline.   I will need to see it move up above 11c before considering buying it again, because that is the top of the recent sideways trading band.

Altura Mining (AJM) also closed below its stop on April 09 and was sold the next day at 39c for a total of $26,070 after brokerage.   It will now need to move up above 42.5c before I look at buying it again.    There was a huge volume spike on Wednesday and the price did not move, so it will be interesting to see how it has behaved after the volume spike.    That should be evident by today.

I have come up against one of the problems I have warned against in the past, and that is trading stocks with low volumes.   CCT Technologies (CT1) was one of the speckies I bought early this year and held onto for too long when I was experimenting with stops.    It broke its stop of 2.2c on April 04 but there has not been sufficient volume for me to sell it since then.   Hopefully I don’t have to write it off altogether.

Australian Vanadium (AVL) has announced it is looking to raise funds.   It will be interesting to see if they follow the current trend of shafting the small shareholders by not giving them any opportunity to participate, in the process diluting the value of their holdings.    The legality of this should really be looked at by the regulators.

 

Past columns, information and DVD’s on my methods are available at:- www.thedaytrader.com.au   

Portfolio Position as at close of trade on April 11 - 2018

 

Stock

No. of Shares

Purchase price

Stop

Wednesdays Close

BIG

5,000

$1.735

$1.56

$2.20

CT1

150,000

3.3c

2.1c

2c

HLX

100,000

5c

3.5c

4c

AVL

250,000

2.4c

4.3c

5.2c

BSM

300,000

1.8c

2c

2.8c

STM

150,000

3.7c

3c

3c

 

Cash       $358,372

Shares    $41,000

Total       $399,372