Day Trader column for September 29 – 2010

As stated last week, because the market had formed the weekly pivot point I had been waiting for and the market looked strong I started buying before a pull back and a daily pivot point (my usual confirmation the uptrend has resumed).   I believe there is strength in the market because there are large numbers of stocks setting up tight consolidation patterns around all time highs or significant intermediate highs.   However, because the market had not yet pulled back on the daily chart and formed a daily pivot point to the upside (the final critical step for the overall market setup) I bought smaller parcels of the stocks mentioned last week than I plan buying for the future.   This was to reduce risk just in case the market suddenly reversed.   As I find around twenty stocks are enough to keep an eye on I will look to buy in amounts between $10,000 and $15,000 once I am confident the market has resumed the uptrend.  

I bought 20,000 Peak Resources (PEK) at 23.5c and the initial stop was places at 21c the previous swing low.   The targets are 32c and 36c.   PEK had a trading halt placed on it on Wednesday pending an announcement.   If the announcement is negative I will likely be stopped out.

4,000 Regis Resources (RRL) were bought at $1.53.   The target price is around $3.00 and the initial stop was $1.415, since raised to $1.42.  

10,000 Saracen Minerals (SAR) were bought at 58c.   The initial stop was 54c since raised to 55.5c.   The target price is around $1.00, the previous adjusted all time high. 

I mentioned last week Talisman Resources (TLM) had also formed a buy signal the previous Friday.   Being cautious I only bought the above three stocks to start, but after TLM pulled back and formed a second buy signal on September 22 I bought 5,000 at $1.15 on September 23.   As I expect TLM to move to new highs I am looking for targets between $2.00 and $3.00 with an initial stop of $1.07.

I bought 5,000 Norfolk Group (NFK) on September 23 at $1.14, as it consolidated in a very narrow price band just below $1.20, a significant resistance level.   The buy trigger was a narrowing of price range and big volume reduction.   The initial target is around $1.50 and the initial stop is $1.095, the bottom of the sideways move.

I also bought 12,000 Macquarie Harbour Mining (MHM) on September 23 at 42c.   The buy trigger in this case was a candle I have found is a half way candle in a move up.  In this case it tells me the target prices are between 55c and 65c, which also coincides with the projected target from the new high.   

Finally I bought 15,000 North Queensland Metals (NQM) at 38c on Friday.   This was on the strength of a daily pivot point after a pull back from the intermediate spike high of 40c.   The initial stop is 35c and the target is between 50c and 60c.   

I will buy Grange Resources (GRR) on Tuesday if it forms a pivot point on Monday.   

Check  www.thedaytrader.com.au  for back copies of the column and dates and details for my Oct/Nov workshops.

Portfolio Position

Stock

Number of Shares

Price Paid

Stop

Friday’s Close

SAR

10,000

58c

54c

57c

RRL

4,000

$1.53

$1.42

$1.455

PEK

20,000

23.5c

21c

22.5c

TLM

5,000

$1.15

$1.07

$1.20

MHM

12,000

42c

39.5

44c

NFK

5,000

$1.14

$1.12

$1.145

NQM

15,000

38c

35c

38.5c

Cash        $228,216

Shares     $38,800    

Total        $267,016

Starting capital $50,000 in July 200