Day Trader column for June 7 - 2019

Last week both the All Ords and the ASX/S&P 200 did not form weekly pivot points to the downside, but the SPI futures did.    Although the SPI formed a weekly pivot point to the downside, it still closed the week a few points above the ASX/S&P 200 which it trades against, indicating there is still strength in the market.    However, on Monday this had changed with the SPI trading below the ASX/S&P 200 but by days end on Tuesday this week it was again positive.    All this is indicating there is still some indecision in the market.

Since last week four stocks in our portfolio were stopped out, so I am now looking for new trading opportunities.   If the index continues to move up from the daily pivot point to the upside formed on Wednesday, I will be adding positions again.

Kogan.com (KGN) did close below its stop on May 24, but because it formed a daily reversal after bouncing off the May 10 low forming a double bottom, I made an executive decision and did not exercise the stop.    However, after moving up for two days it formed a daily pivot point to the downside on May 30.    This was a reversal after retesting the May 20 high and I then decided to sell on May 31 at $5.73 for a total of $5,710.   It has also now broken the uptrend formed since March.   

Now to the stops on Mount Gibson Iron (MGX) which has been questioned by a regular reader.   To start, I do acknowledge I missed the spike low at $1.075 on April 10 and this resulted in me remaining in the trade up to the recent high of $1.305 on May 17.   After this the stop was raised to $1.21 as per last weeks column and it was again raised to the spike low of $1.23 on May 24.   This stop was broken on Friday last week and was sold on Monday at $1.19 for a total of $23,770 after brokerage.

Rhipe (RHP) had its stop raised to $2.315 and this was broken on Friday last week and was sold on Monday at $2.28 for a total of $18,210.

The fourth stock stopped out was Fortescue Metals (FMG) after it fell, after going ex-dividend.   The day after the fall it traded up a small amount to form another spike low of $8.19 on May 22.   This new stop was broken on May 30 and it was sold next day at $8.04 for a total of $8,020 after brokerage.

The 60c dividend has been added to the cash position.  

I have been asked if I adjust my data when a dividend is paid.   I don’t adjust data for dividends, as I have found stocks often continue to fall after a dividend is paid, and if it does, then often it can be again bought after the fall if the pattern indicates it will resume the uptrend.

Another question I have been asked to talk about is the tax situation in the portfolio.   I have mentioned in the past that I have elected to not include tax implications on the portfolio, because there are many different situations where tax is concerned.   Consequently, the portfolio only includes actual trading results.

 

 

 

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

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

 

Stock

No. of Shares

Purchase price

Stop

Wednesday Close

PNV

10,000

94c

$1.175

$1.27

DUB

5,000

99.5c

$1.12

$1.165

NVO

200,000

1.6c

1.3c

1.4c

 

Cash       $402,809

Shares    $21,325

Total       $424,134