Darryl's Trading Diary July 8 - 2019

Last week the All Ords closed above 6,800.    This was the highest weekly close ever and just twenty two points below the highest daily close in 2007.    The intraday high on Friday was also just twenty three points below the all-time high.

It looks very likely we will see a new intraday high this week and perhaps a new all-time daily close.

Once the market has confirmed it wants to continue with the uptrend, which will be after a retest of the 2007 high, if in fact it moves above 6,900.

What tells me we are in the final throws of the long term uptrend is the five point reversal which has been forming since the beginning of 2018.   What we are currently seeing is the fifth leg.   The interesting thing to watch is how far this fifth leg extends before the market reverses and begins a very rapid move to the downside.     What usually happens is the fall continues down for double the distance that the fifth move has moved up.   

What that means is if the 10,000 to 11,000 target I have spoken of is reached, then the move down that follows would have a target around 4,000.

If you have any doubts this is possible, all you need to do is look at the percentage rise and fall in the market crash of 1987.   This could be a similar situation as it is currently playing out in a similar manner.   

If this all plays out as I suspect it will, then the fifth wave up will provide some great trading opportunities, but it will be essential to maintain tight trailing stops so as not to be caught when the reversal occurs.   Reversals from “blow off” tops are often swift and steep. 

This is not the time to be a long term investor.

I have been travelling to Melbourne to conduct the Worksop next weekend and as a result I have not bought any new stocks but have kept an eye on those held and none have broken their stops.

However, two stocks I am watching closely are Carnarvon Petroleum (CVN) which should give a daily pivot point to the upside as a buy signal some time this week.   

Another stock is Mach7 technologies (M7T) which is looking strong and has a lot of upside potential.   I missed the buy signal last week but will now wait for a possible pullback to retest the October 2016 high.

I expect some new trading opportunities will arise this week and I will detail them and discuss stocks that are setting up in next weeks diary.

If any reader still wants to attend the workshop and has not booked their spot, there is one spot still open.

Several of the stocks held in the portfolio have been consolidating over the past week or so and I expect they will begin to move back up this week.

Both NET and PNV moved up strongly and still have a way to go to their respective next targets.

 

 

Portfolio Position as at close of trade on July 05 – 2019

 

Stock

No. of Shares

Purchase price

Stop

Wednesday Close

PNV

10,000

94c

$1.50

$1.71

DUB

5,000

99.5c

$1.225

$1.23

NET

100,000

9.9c

16.5c

22c

RHP

8,000

$2.32

$2.72

$2.77

RAP

50,000

18c

16c

18.5c

OCC

15,000

47.5c

45.5

48.5c

WKT

20,000

36.5c

34.5c

38c

 

Cash       $352,764

Shares    $91,538

Total       $444,302

Last week the All Ords closed above 6,800.    This was the highest weekly close ever and just twenty two points below the highest daily close in 2007.    The intraday high on Friday was also just twenty three points below the all-time high.

It looks very likely we will see a new intraday high this week and perhaps a new all-time daily close.

Once the market has confirmed it wants to continue with the uptrend, which will be after a retest of the 2007 high, if in fact it moves above 6,900.

What tells me we are in the final throws of the long term uptrend is the five point reversal which has been forming since the beginning of 2018.   What we are currently seeing is the fifth leg.   The interesting thing to watch is how far this fifth leg extends before the market reverses and begins a very rapid move to the downside.     What usually happens is the fall continues down for double the distance that the fifth move has moved up.   

What that means is if the 10,000 to 11,000 target I have spoken of is reached, then the move down that follows would have a target around 4,000.

If you have any doubts this is possible, all you need to do is look at the percentage rise and fall in the market crash of 1987.   This could be a similar situation as it is currently playing out in a similar manner.   

If this all plays out as I suspect it will, then the fifth wave up will provide some great trading opportunities, but it will be essential to maintain tight trailing stops so as not to be caught when the reversal occurs.   Reversals from “blow off” tops are often swift and steep. 

This is not the time to be a long term investor.

I have been travelling to Melbourne to conduct the Worksop next weekend and as a result I have not bought any new stocks but have kept an eye on those held and none have broken their stops.

However, two stocks I am watching closely are Carnarvon Petroleum (CVN) which should give a daily pivot point to the upside as a buy signal some time this week.   

Another stock is Mach7 technologies (M7T) which is looking strong and has a lot of upside potential.   I missed the buy signal last week but will now wait for a possible pullback to retest the October 2016 high.

I expect some new trading opportunities will arise this week and I will detail them and discuss stocks that are setting up in next weeks diary.

If any reader still wants to attend the workshop and has not booked their spot, there is one spot still open.

Several of the stocks held in the portfolio have been consolidating over the past week or so and I expect they will begin to move back up this week.

Both NET and PNV moved up strongly and still have a way to go to their respective next targets.

 

 

Portfolio Position as at close of trade on July 05 – 2019

 

Stock

No. of Shares

Purchase price

Stop

Wednesday Close

PNV

10,000

94c

$1.50

$1.71

DUB

5,000

99.5c

$1.225

$1.23

NET

100,000

9.9c

16.5c

22c

RHP

8,000

$2.32

$2.72

$2.77

RAP

50,000

18c

16c

18.5c

OCC

15,000

47.5c

45.5

48.5c

WKT

20,000

36.5c

34.5c

38c

 

Cash       $352,764

Shares    $91,538

Total       $444,302