Day Trader column for January 5 - 2018

 

 


Our market has just marked time during the holiday period, but some stocks made gains during this period.    It is the resource and mining stocks which have held up the overall market over the past couple of weeks have been making gains while the finance and retail stocks have been moving sideways or making slow moves to the downside.


We should see which way the market is headed with the first full week of trading after the holidays, so next week will be interesting.


Now that my stops are back on track the percentage loss can be considerable with low priced stocks so I try to keep likely losses below my loss limit in dollar terms.


Although the market has been quiet I did find three stocks to buy on Wednesday.


I bought 20,000 Aurelia Metals (AMI) at 30c each for a total of $6,020 including brokerage.    The initial stop is 26.5c which is the spike low formed on Friday of last week and Tuesday this week.   AMI has now broken above several spike highs formed since the beginning of 2015 and has an initial target just above 40c and I expect it to find some resistance there and if it breaks above 40c it will find much stronger resistance between 60c and 80c where I will sell and see how it behaves.   If the market is still showing strength and AMI does not reverse, but consolidates then it would be set for a further move to around $1.50.


The next stock bought was 150,000 CCP Technologies (CT1) at 3.3c for a total of $4,970 including brokerage.   The initial stop is 2.5c which is the highest spike low in the past month.   There were two lower spike lows either side of the mid December low I am using.    As I said above the stops on “penny dreadful” stocks sometimes have to be a large percentage below purchase price and in this case I am comfortable using the previous but slightly higher spike low.   One reason I do not buy large dollar amounts of low priced stocks is because when a pattern does not fulfil its promise and the price falls it can wipe out half and more of the capital invested.


Now to the targets for CT1, and at this stage I am using the pattern formed since June this year to project the targets.    It is a classic cup and handle pattern and the handle formed in December which has a range from approximately 2.5c to 4c giving us a range of 1.5c to project above 4c and the resulting 5.5c also just happens to be a spike high in August/September 2016.  


The third stock was 100,000 Helix Resources (HLX) bought at 5c for a total of $5,020.    The initial stop is 3.5c which is still a considerable dollar loss if triggered.    The target is between 6c and 7c which was the spike high formed in February 2017.


 


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


Portfolio Position as at close of trade on January 03 - 2018


 


Stock

No. of Shares

Purchase price

Stop

Wednesdays Close

AJM

60,000

27.25c

39c

48c

BIG

5,000

$1.735

$3.18

$3.62

AUZ

300,000

2.3c

9.6c

12c

AML

25,000

20c

29c

33c

WHC

3,000

$3.68

$4.35

$4.55

LIT

50,000

20.5c

19.5c

20c

PLS

10,000

86c

$1.09

$1.18

QBL

150,000

3.1c

4.7c

5.2c

A2M

3,000

$7.13

$7.01

$7.43

LKE

25,000

24.5c

25c

27.5c

AMI

20,000

30c

26.5c

30.5c

CT1

150,000

3.3c

2.8c

3.9c

HLX

100,000

5c

3.5c

4.6c


 


Cash       $252,137


Shares    $180,115


Total       $432,252