Day Trader column for May 17 - 2019

Last week we saw our market continue to consolidate around the 6,400 level on the All Ords and this week we saw it fall on Tuesday, but it closed the day well off its lows.   On Wednesday it traded up all day and closed the day just 10 points below Tuesdays high.    This all looks like the consolidation after the break above the 6,400 resistance has almost played out and we will likely see the market continue to move up and resume the uptrend until it meets the all-time high.

On Wednesday the SPI futures formed a clear daily pivot point to the upside, and closed the day three points higher than the ASX/S&P 200 which is another sign to me that there is strength coming back into the market.

Mount Gibson Iron (MGX) continued to consolidate in a narrow range just below $1.20 and was unaffected by the market fall early this week.   Once it now breaks above $1.20 it will be on its way to the next major resistance at $2.40 which is the spike high formed in 2010 after it ran up from its 2008 low of 37c.   There are very few resistance points on the chart between $1.20 and $2.40, so I expect it to move up at a steady rate from here with the normal small pullbacks as it takes the occasional breather.

Rhipe (RHP) was also unaffected by the market fall on Tuesday but it did form a daily reversal on Wednesday so it will likely consolidate for a bit longer before the uptrend resumes and it then heads towards its next serious resistance around $3.40.

Polynova (PNV) formed a daily pivot point to the upside on increased volume on Wednesday.  So it looks like the consolidation that has been taking place over the past two weeks has run its course and it now looks set to break above the $1.20 resistance, which was a spike high formed at the beginning of 2007.    It will then also have a target of $2.40, which was its all-time high formed at the end of 2004.

Kogan.com (KGN) fell from around $9.50 early last year to a low of $2.60 in November 2018 and has since climbed back to a support/resistance level of $6.00.   For the past four weeks it has been consolidating in a narrow trading range either side of $6.00 and for the first time since it started consolidating around $6.00 it moved up on increased volume on Tuesday this week and closed above $6.00.   I bought into it yesterday and the details will be in next week’s column.    The target price is the previous high where it will need to again consolidate if it is going to break to new all-time highs.

Fortescue Metals (FMG), after a fall to lows below $4.00 in October last year traded up to $8.00 in April and consolidated for a little over a week before falling back to $7.00 on falling volume.    $8.00 is a strong support/resistance level from back in 2007/2008.    After the move down to $7.00 it moved up to $7.50 and again consolidated for a week.    Tuesday this week it also moved up on a big volume increase giving me the signal to buy it yesterday.

 

 

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 15 – 2019

 

Stock

No. of Shares

Purchase price

Stop

Wednesday Close

MGX

20,000

62.5c

$1.055

$1.15

RHP

8,000

$1.79

$2.05

$2.21

PNV

10,000

94c

97c

$1.06

 

Cash       $369,622

Shares    $51,280

Total       $420,90n2