Day Trader column for February 26 – 2013

Ouch! Last week was a nasty week and it was pretty much across most stock sectors. I had expected the Index to make a slow pull back to test the 5,000 level as stated in several previous columns. It was interesting to note when I had a look at the broker’s site at the end of the day last Thursday, that the fall had been steady right across the day. Usually when there is a large market fall we see a big fall on the open, then some kind of recovery before the market either trades sideways for the rest of the day or goes into a further decline. Thursday’s action was different. There were many stocks which had very sharp falls but there were still stocks which held up.

There was a general bounce on Friday and it was also pretty much across the board for the stocks which fell on Thursday. However Friday saw a number of stocks which gave a reversal signal on Thursday follow through and fall. In many cases these formed daily pivot point reversals to the downside so we may see these fall further.

Now to answer some readers who have emailed in regard to TPG Telecom (TPM). The reason it was not sold on the stop shown in the column was because it was one of the stocks I was experimenting with a different initial stop system for when a stock first breaks out.

In this case it meant the stop I reverted to using was $2.61, the swing low immediately prior to the breakout. You will have seen the damage that did to me last week when it fell over 30 cents in one day and when I sold the next morning I received $2.45 per share for a total of $14,670.

The galling thing about the trade was I sold close to the bottom of the fall and that day and the next saw it recover to form a daily pivot point to the upside.

Regardless, I will leave it alone until it trades above $2.80 then decide if it has set up again.

I also sold Hot Chilli (HCH) on Friday after it closed below its stop level on Thursday. I received 67.5 cents per share for a total of $6,730.

Poseidon (POS) was another stock in the experimental stop situation until the stop was raised to 24.5 cents last week. After it closed below its new stop on Thursday it was sold on Friday. In this case I missed out on selling on the open and immediately changed the order to a market order and it was sold at 22 cents for a total of $5,480 which turned out to be the low for the day.

The next to be sold on Friday was Ambassador Oil and Gas (AQO) which sold at 19.5 cents for a total of $4,855.

The first stock to go for the week was Antares Energy (AZZ) which broke its amended stop of 56.5 cents last Tuesday. It was sold at 56 cents for a total of $5,580.

I will be conducting a workshop on April 06/07 at the request of several readers, and there are still limited places available.

For workshop details and to view previous columns and my method which is available on DVD goto:- www.thedaytrader.com.au

Portfolio Position

Stock

No. of Shares

Purchase price

Stop

Fridays Close

SEH

30,000

13.5 cents

15 cents

15.5 cents

CLO

6,000

$1.025

$1.23

$1.28

WTF

1,000

$5.85

$5.71

$5.75

AWC

5,000

$1.15

$1.075

$1.18

Cash $269,986

Shares $23,980

Total $293,966