Day Trader column for December 1 - 2017

 

There was considerable volatility in the indices over the past two weeks and this week, as of Wednesday we have seen the momentum move back to the upside.    We still have the SPI futures contract trading at a premium to the S&P/ASX 200 which it trades against, which augers well for the continued move up.    As of Wednesday the All Ords again traded above 6,100, but closed the day two points below 6,100.    S&P/ASX 200 closed above 6,000 indicating the momentum is wide based.

My decision to put stops on hold while I studied the effect stops were having on our portfolio in this transition from long consolidation to the beginning of a strong uptrend has at the moment been beneficial.    Some of the stocks purchased had strong moves up from long consolidation and it is usual for there to be a pullback after these strong moves.    Once the uptrend is well established then my policy of placing stops at the most recent spike low will again be my preferred method of stop placement.

You will notice the stops on the portfolio position have not been amended so  what will happen is the noted stops will be used and adjusted up as the stock price moves up again.    I will comment on each individual stock to clarify what I have in mind.

This is a new concept for me when it comes to stops as I have for many years used stops without fail.    It is my plan to revert to rigid stop placement soon and I will make it clear when I am back on track.

There are three stocks in the portfolio which are trading below their respective stops.    Whitehaven Coal (WHC) I commented on last week and has moved up this week and depending how it behaves this week I will decide whether to sell or hold it.

Artemis Resources (ARV) fell to trade below its stop and within the October consolidation range early this week and if it does not reverse to the upside by the end of this week it will be sold.   It is still well above its purchase price.

The other stock trading below it stop is Australian Mines (AUZ) which formed a daily pivot point to the upside on Monday around the level of the recent share placement so it will now need to resume the uptrend or it will be sold.

I have written many times in the past about what I believe to be gross discrimination against small shareholders when placements are made and new shares are issued to large investors.    The effect of these placements is to reduce the value of shareholders who do not get the opportunity to participate in the fundraising.

Enough said for the moment and now on to three small stocks I am watching closely.     Rimfire Pacific Mining (RIM) looks to be consolidating after a strong move up to resistance going back four years.   Venture Minerals is in a similar position and European Cobalt (EUC) is consolidating around 24c.

 

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

 

Portfolio Position as at close of trade on November 29 - 2017.

 

Stock

No. of Shares

Purchase price

Stop

Wednesdays Close

AJM

60,000

27.25c

34.5c

40.5c

ARV

25,000

24c

39.5c

31.5c

BIG

5,000

$1.735

$3.18

$4.10

AUZ

300,000

2.3c

9.6c

9.1c

AML

25,000

20c

20.5c

27.5c

WHC

3,000

$3.68

$3.90

$3.85

LIT

50,000

20.5c

19.5c

19.5c

PLS

10,000

86c

82.5c

$1.035

QBL

150,000

3.1c

4.7c

7.3c

A2M

3,000

$7.13

$7.01

$7.58

 

Cash       $268,187

Shares    $152,190

Total       $420,377