Day Trader column for October 11 - 2016

 

The All Ords continued to edge towards the 5,600 support/resistance level last week and as yet has not had the daily pullback I mentioned a couple of weeks ago, as the next step in my confirmation process of the uptrend continuing.   It does look as though there is a slow roll over on the daily chart which began last week as a sideways trading range.    Any pull back is likely to be arrested around 5,500 as there is some minor support/resistance at that level.

I am still optimistic we will see our market begin to move up strongly between now and the end of the year and that is likely to lead to an extended period of strong market growth.

When I was stopped out of Emerchants (EML) I talked about having possibly been too aggressive in the placement of the stop.   I also mentioned I would buy it back if it closed near $1.80 which was the top of the previous month’s narrow trading range.    When it closed at $1.795 on Monday last week after a very narrow daily trading range it was time to buy back into it.   As is my usual practice I bought it at the open the next day and bought 4,000 at $1.775 for a total of $7,120 after brokerage.    The initial stop is $1.725 and will be raised as soon as it moves up again and forms a higher daily spike low.

The targets are still as discussed when it was bought previously at $2.40 then $2.80 which are projections of the recent pattern beginning in April this year and the second a projection of the pattern formed since late 2010.

It is interesting to note how the stop of 10c which was the spike low formed on the Tawana Resources (TAW) daily chart on September 22 halted the move down on Monday last week.   

I continue to find using the previous daily spike low as a stop on lower priced stocks seems to hold in the vast majority of cases.   I am still working on a stop system for higher priced stocks using a weekly chart and will discuss these whenever I buy a stock and think it is appropriate to give the stock a little more leeway.

Resapp Health (RAP) again has demonstrated how using the previous daily swing low of 44c has acted as support/resistance and if all goes according to plan then we should see the price begin to move up again.   If it does move up from here the projection of the pattern formed over the last couple of weeks would give a target close to 70c which is also the target projected from the pattern formed from June until the end of September this year.

As of Friday Whitehaven Coal (WHC) looks set to break above $3.00 and move towards its target of $3.50 and depending how it behaves there I may decide to sell around that price.   It will likely spend some time consolidating between $3.50 and $4.00 which is a significant resistance level.    If it breaks above $4.00 then it has a target of $7.50 which is also its previous all-time high formed in 2010/11.

I am watching Nufarm (NUF) and Impedimed (IPD) for possible entry signals this week.

 

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

RAP

25,000

32c

44.5c

45c

WHC

3,000

$1.74

$2.42

$2.74

TAW

25.000

12.5c

10c

14c

EML

4,000

$1.775

$1.725

$1.975

 

Cash       $327,072

Shares    $30,870

Total       $357,942