Still waiting for upward patterns
OUR market has still not closed above the recent near 12-week sideways move, where the All Ords has traded between 5700 and 5850, and still has not formed that elusive weekly pivot point to the upside.
However, there continues to be more stocks each week forming patterns that will likely lead to a move up and this is particularly the case with stocks priced below $2.
This trend is evident right down to stocks trading below 10c, which is not what would be expected in a market setting up for a fall.
This all means I am still looking for our market to move towards 6000, but it is sure trying my patience.
On Tuesday this week, Pantoro (PNR) closed at 22.5c, which was below its stop and it was sold at 22c on Wednesday for a total of $5480 after brokerage.
I will keep an eye on PNR as a move up into the sideways trading range on increased volume could trigger a move to about 30c.
I have raised the trailing stop on A2 Milk Company (A2M) to $4.13, the spike low formed on August 3.
Lynas (LYC) looks to have finally broken above the 14c support/resistance level and is heading towards its next target at 20c and when it moves above 20c the next target is around 30c.
Big Un (BIG), which I was stopped out of recently, has possibly reversed its move down. If this is the case, I will look to trade it again.
On Wednesday I bought 30,000 Altura Mining (AJM) and, as this is written before the market opens on Thursday, the details will be in next week’s column.
The reasons for the purchase, however, are that AJM has run up from 15c to 18c, which is a strong support/resistance level that has proven to be resistance over the past year — and as it has traded either side of 18c for three days, it will likely break to the upside and it then has a target around 25c.
Global Geoscience (GSC) is another stock I am waiting to form a low-risk buy signal.
That signal will be a move above 22c and then a small pullback to retest 21.5c, which is the spike high formed in May this year and also earlier this week.
I have mentioned before that the stocks likely to lead any strong move up will be from the tech, healthcare and resource sectors.
There are also several stocks involved in the medicinal cannabis industry that are worth watching. It seems many of the resource stocks likely to provide good trading opportunities are involved, one way or another in rare earth metals, used in computer, aerospace, power generation and medical industries.
Retail stocks are not reflecting the negative consumer sentiment we hear from various surveys. Woolworths (WOW), JB Hi-Fi (JBH) and Nick Scali (NCK) are three of the higher-priced retailers setting up for a potential move to higher levels.
There are quite a number of lower-priced retailers setting up for moves to higher levels but as yet they are trading on low volumes. As soon as volumes increase on these they will provide some good trading opportunities.