Day Trader column for October 18 - 2016

 

Still more uncertainty in our market last week as the All Ords and the ASX/S&P 200 did not form weekly pivot points to the downside, as the high for the week was the same high as the previous week, or in the case of the ASX/S&P 200 it was the actual high for the recent move up.   On the other hand there was a weekly divergence between these two indices as one made a new high and the other did not.    This indicates a high probability we will see a further move down. 

This all falls within the scenario I have discussed over the past couple of weeks where I was looking for a daily pullback after the weekly pivot point to the upside four weeks ago.   If and it is an if this daily pullback is arrested before the All Ords falls below the low formed in September and reverses to the upside then we are still looking at a continuation of the uptrend.   Of course a reduction in volume over the duration of the fall will add weight to the likelihood of the uptrend continuing.

It was interesting to note that in my weekly market scan many of the stocks I have been watching are also now taking a breather.   

Although there is still a large gap between the All Ords and the ASX/S&P 200, I am finding there are now almost equal numbers of stocks setting up for a move up from both high and low priced stocks.

The large part of the lag in the ASX/ S&P 200 is now due to the top half dozen stocks still struggling to gain momentum.

Although three of the four stocks in our portfolio moved down for most of last week, all were up for the week with the exception of Tawana Resources (TAW) which closed the week down half a cent.   None however closed below their respective stops and Emerchants (EML) was the only one to form a higher spike low, which means its trailing stop has been raised to $1.945.

Whitehaven Coal (WHC) paused, and it looks like it consolidated during last week’s market pullback.   If it is in fact a consolidation we should soon see it moving up again on its way to its next target around $3.30 to $3.50.   It should meet with some serious resistance at that level and I will look to sell it when it shows signs of reversing around that level.

Now to the two stocks I stated I was watching last week, Nufarm (NUF) and Impedimed (IPD).         

Although NUF continued to fall last week it did not fall far enough to form a weekly pivot point and actually formed a daily reversal to the upside on Friday.   If it forms a daily pivot point to the upside this week I may buy it, but I will also be looking for it to close above the recent downtrend and for it to have increased volume.

IPD fell below the sideways consolidation range on Monday last week but recovered to close the week inside that range.   As the market is still uncertain, I will wait for it to close above $1.65, which is the top of the recent sideways move before making a decision to buy.

 

 

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

47c

WHC

3,000

$1.74

$2.42

$2.87

TAW

25.000

12.5c

10c

13.5c

EML

4,000

$1.775

$1.945

$2.00

 

Cash       $327,072

Shares    $31,735

Total       $358,807