Day Trader column for March 22 - 2016

 

Our market still does not know which way to go.    Last week after falling around one hundred points, the All Ords and the S&P/ASX 200 both recovered to end the week up a few points, however the SPI futures contract closed the week down seventeen points.    On Friday all three indices formed daily reversals to the downside so we may see some more volatility this week as the market struggles for direction at the downtrend line.

This volatility did not help three of the stocks bought last Monday which were stopped out within a day or two of purchase.

Despite these three stocks and an existing stock being stopped out the portfolio still managed a modest gain of around $400 for the week.     I am still looking for the market to decisively break the downtrend and provide more positive trading opportunities.

As per last week’s column I bought 5,000 Appen Ltd (APX) at $1.67 for a total of $8,370.    Its stop was $1.62 the spike low formed on March 09 and the day of purchase it opened on its high for the day and proceeded to fall and closed at $1.60.    As a result, it was sold the next day at $1.60 for a total after brokerage of $7,980.    After it was sold it moved up for two days to $1.75 but then reversed and closed the week at 1.66.   I am still watching it, and it will need a daily close near to $1.80 before I will consider it again.    If it does move above $1.80 and then the December 2015 high of $1.895 then the there is a potential target around $2.50.

The next stock bought was 10,000 Doray Minerals (DRM) at 89.5c for a total of $8,970 and its stop was 88c, the spike low formed on March 10.    It managed to hang in there the next day, but on March 15 it fell sharply to close at 85c and was sold the next day at 84c for a total of $8,380.    I will also continue to watch DRM as a clear break above 90c would see it with a potential target around $1.50.

The next stock bought was 7,000 Saracen Minerals at $1.015 for a total of $7,125.    Its stop was 97c the spike low formed on March 10 and it too hung in for a couple of days but closed below its stop on Wednesday and was sold on March 17 at 98c for a total of $6,840.    The reason for purchase was the recent break above $1.00 and the subsequent retest, followed by a daily pivot point to the upside.    The fact it did not get on with the move and remains below $1.00 indicates to me it may have some further consolidation and a possible retest of the uptrend line at around 90c before a clear break of $1.00 sees it on its way up again.

The only stock bought last week which has not been stopped out is Pilbara Minerals (PLS).   I bought 15,000 shares at 36,5c for a total of $5,495 and the stop is the 33.5c the spike low of March 10.   

Finally, 12,000 Resolute Mining (RSG) was sold after it broke its stop on March 16 at 61.5c for a total of $7,360.

 

 

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

Portfolio Position

 

Stock

No. of Shares

Purchase price

Stop

Fridays Close

MML

10,000

60c

69.5c

81c

PLS

15,000

36.5c

33.5c

38c

GOR

15,000

46c

47c

53c

RFX

15,000

34c

35.5c

46.5c

 

 

 

Cash       $303,334

Shares    $28,725

Total      $332,059

 

 

hat the SPI contract was a leading indicator for the market direction and last week the gap between it and the S&P/ASX 200 had narrowed from around 27 points to 6 points so that is another pointer that we may see a further move up.

However, most of the major stocks are up against the downtrend line dating back to early last year, so any sort of move up from here will see a break of that line.

Since December last year there has been a great deal of volatility in the market as many of the major stocks and the indices have formed several weekly pivot points to the upside followed by pivot points to the downside.    This is telling me the market despite the negative sentiment is having a lot of trouble breaking the 5,000 level.

But until the positive move is confirmed by a break of the downtrend and if the market happens to fall away again, that 4,600 level is still in play.

On Monday February 29 A2 Milk Company (A2M) was sold as per last week’s column and as seems to happen quite often of late, it was sold at what appears to be the bottom of the move.   This is another indication the market is having difficulty moving lower as stocks which break their stops more often move lower.   Anyway it was sold at $1.625 for a total of $6,480 after brokerage.

I was also stopped out of Redflow (RFX) when it closed below its stop of 30c on March 01.   It was old at 29.5c for a total of $5,880.

Both the above stocks are still in setup patterns and I will look to buy them if they form suitable low risk buying triggers.

I have been asked what triggered my buying Gold Road Resources (GOR).   From October last year until February this year it had slowly pulled back from 47c to 35c and after trading intraday above 47c on February 12 it pulled back to 42c then formed a daily pivot point to the upside and when it held that level for a couple of days on low volume I decided to buy with a clear stop at 42c.

Its stop has now been raised to 47c the spike low formed last Wednesday.   The volume increases and price action over the last three days has me concerned it may break to the downside.

To ensure getting filled at the open your order should be at or above the indicative price.    It will be filled at the open provided there are enough sellers at or above that price, so provided your order is at or near the top of the queue the order will be filled at the open even if the opening price is below your bid price.

 

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

Portfolio Position

 

Stock

No. of Shares

Purchase price

Stop

Fridays Close

MML

10,000

60c

56c

74c

RSG

12,000

47c

57.5c

61.5c

GOR

15,000

46c

47c

49.5c

 

 

 

Cash       $307,854

Shares    $22,205

Total      $330,059