Day Trader column for May 24 - 2019

It would appear the market knew something the pollsters didn’t last week.   The market optimistically closed close to its high for the week and on Monday continued to show how it felt about the election.    On Wednesday the All Ords closed on its high of 6,598 which is just 275 points below the all-time high.   I have said before we can expect a pullback or at least some consolidation at or below the all-time high.   However, if the index breaks above the all-time high then I would expect it to then pullback and test the high before it continues the uptrend.

The SPI futures continue to trade above the ASX/S&P 200, as it has for a couple of weeks now, another indicator telling me the professionals are positive.

I do expect new highs in the near future and some of you may remember that I noted a year or two ago that a break above the all-time high would have a target around 10,000.    I would expect to see this target possibility reached within the next year or so.

Mount Gibson Iron (MGX) moved higher on its way to its next target and I have raised its stop to $1.13 which is the spike low formed on May 14.

Rhipe (RHP) has also continued to move higher and has also had its stop raised, in this case to $2.10, the spike low also formed on May 14.

PNV on the other hand has slowly pulled back from the strong move up on Wednesday last week and closed the week to Wednesday at $1.06 the level it closed at the previous Wednesday.    I expect it will move up from this level and soon break above the May 01 high of $1.16.

As per last week’s column I bought 1,000 Kogan.com (KGN) on May 16 and I paid $6.12 per share for a total of $6,140 including brokerage.   The initial stop is $5.79 which is the spike low formed on May 14 and the target is $9.50, which is an extension of the pattern formed since the beginning of October 2018, and is also the all-time high formed in February 2018.   Like the index I would expect it will take time to consolidate around its all-time high if its to break to new highs.     I will look to sell it there at any sign of it reversing to the downside around $9.50.

The other stock bought last Thursday was 1,000 Fortescue Metals (FMG) at $8.25 for a total of $8,270.    The initial stop is $7.44 which is the low of the big move up on May 14 as the price clearly broke above the narrow consolidation over five days between $7.40 and $7.60 which triggered the buy.   The target is $10.50 then close to $13.00.    The reversal and fall from $9.30 occurred at the extension of the pattern formed over the past month.    It may well be this fall will continue and that will be clear by the end of trade today.  

Another stock I was stopped out of a couple of weeks ago, Cirrus Network Holdings (CNW) had its fall arrested at 4c and I am still looking to buy it again.   

 

 

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 22 – 2019

 

Stock

No. of Shares

Purchase price

Stop

Wednesday Close

MGX

20,000

62.5c

$1.13

$1.26

RHP

8,000

$1.79

$2.10

$2.48

PNV

10,000

94c

$1.00

$1.06

KGN

1,000

$6.12

$5.79

$6.25

FMG

1,000

$8.25

$7.44

$8.27

 

Cash       $355,212

Shares    $70,160

Total       $425,372