Day Trader column for May 10 - 2019

The fall in the indices discussed last week was reversed for one day on May 02, when it formed a daily pivot point to the upside, but in this case it did not follow through and the move down continued until Tuesday this week when the move down may have been arrested.

If we don’t see a weekly close below 6,350 today on the All Ords, then there will be no weekly pivot point and the uptrend will remain in place.    However if the weekly pivot point forms then the next support level is 6,200.

Just as an aside I often hear traders and the media saying either the Dow Jones has gone down so we will follow suit or it has gone up overnight so we will follow.    What I have found is quite often the opposite is the case, and this I believe is because overseas players can buy or sell our market in the last hour or so of the day which is before the US market opens.    So if they believe the US market is going to fall then they sell stocks in our market and vice versa.    The fact that some of our larger market cap stocks are also listed in the US helps facilitate this.    This can explain why our market on occasion runs up or falls at the end of the trading session.

Back to the fall in our market and in the past week a couple of the stocks held in the portfolio fell to levels below their respective stops and were sold.

Graphex Mining (GPX) was sold on May 07 at 26c for a total of $5,180.   If GPX finds support around 24c where it closed on Wednesday and then comes around and back up to near 30c I will look at it again as the pattern which has been setting up over the past eight months is still in place.   However a fall back to around 20c would put the pattern into doubt.    One of the problems with trading stocks with lower volumes, is large falls like we saw on Monday are sometimes the result.

The other stock sold was PTB Group (PTB) which was sold on Tuesday at 72c for a total of $7,180.     The fall in this case was triggered when it went ex-dividend on Monday.    The dividend was 7c per share and as usually happens the price fell more than the 7c but as the dividend was fully franked the fall was in line with dividend plus the franking credit.    But, the price continued to fall and just how far the fall continues remains to be seen.   It may find support around 65c which is the spike low formed at the end of March.    I have only added the 7c dividend to the cash position in the portfolio.

The tree remaining stocks have all had their respective trailing stops raised.

In the case of Rhipe (RHP) the stop was raised to the spike low formed after last week’s fall was arrested at $2.05.

The stop for Mount Gibson Iron (MGX) has been raised to $1.055 which was the spike low formed on May 03.

Polynova (PNV) had its stop raised to 97c, the spike low formed on Monday.

 

 

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

Portfolio Position as at close of trade on May 08 – 2019

 

Stock

No. of Shares

Purchase price

Stop

Wednesday Close

MGX

20,000

62.5c

$1.055

$1.21

RHP

8,000

$1.79

$2.05

$2.07

PNV

10,000

94c

97c

$1.05

 

Cash       $369,622

Shares    $51,260

Total       $420,882