Day Trader column for December 15 - 2017

As of last week the indices continued to edge higher and the SPI futures contract remained above the S&P/ASX 200, so as far as the big picture goes the market is still looking OK.   However, it will require an incredible burst of strength for the indices to reach their all-time highs by the end of the year as I thought might happen some weeks back.    Now we will be lucky to see the All Ords reach 6,200 by the year end.

I was out on market timing but the whole market setup is looking remarkably positive.   The pattern formed since early November gives a projected target of 6,200 once it breaks above recent highs.

The pattern formed from April/May this year has a projected target of 6,300, again subject to breaking the recent highs.

Then we have the bigger picture represented by the pattern formed from early 2015 giving a projected target above the all-time market high.  

Unless some serious market reversal occurs before the November high is broken we can look forward to continuing market gains.

I have decided to revert to my tried and trusted stop system until I do some further testing on different systems, but I will continue to hold the couple of stock currently trading below their stops for a while longer.    The lesson learned is, I don’t like giving back as much of the profits as I thought I could handle, so stay tuned.

There are a couple of questions I have not had space to answer recently, but first I should remind you this is not a tipping service, but a diary of my trading, plus I share my trading thoughts and systems with you.    I am not able to provide daily updates, but I hope you will learn to find and manage trades for yourself.    The DVD set of my past workshops will speed up your learning curve.

Something I have given consideration to is selling portions of a trade as the price moves up.  My belief is if it was appropriate to sell then all should be sold, but I have been re-thinking this position along with the question of stops recently and I will share my decisions when they are properly thought out.

I am often asked about my search criteria.   In the past I have written formula to scan my data base for various patterns, but now I actually look at every chart each week.    I do break the data into three price groups.    Under 10c, then 10c to $2.00 and over $2.00.     I don’t use the slide show function but move through the charts manually.    This way I can easily look at all the stocks in our market in about a half hour.   I found that after a while the few patterns I look for jumped out at me if I moved through them quickly.    I make a note of the stocks that look good and when I have scanned every stock I then take a closer look at the noted stocks.

 

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

 

Portfolio Position as at close of trade on December 13 - 2017.

 

 

Stock

No. of Shares

Purchase price

Stop

Wednesdays Close

AJM

60,000

27.25c

35.5c

35.5c

ARV

25,000

24c

39.5c

30c

BIG

5,000

$1.735

$3.18

$3.30

AUZ

300,000

2.3c

9.6c

8.6c

AML

25,000

20c

20.5c

30c

WHC

3,000

$3.68

$3.90

$4.11

LIT

50,000

20.5c

19.5c

18.5c

PLS

10,000

86c

82.5c

96c

QBL

150,000

3.1c

4.7c

5.8c

A2M

3,000

$7.13

$7.01

$7.07

 

Cash       $268,187

Shares    $139,690

Total       $407,877