All-time high beckons as pivot nears

LAST week the All Ords and the ASX 200 both closed higher than they had for the past couple of months, and as of Wednesday this week the daily close on the All Ords was well above the 5824 needed to form the weekly pivot point I had been waiting for.

So long as the market holds up – yesterday and today – I expect we are about to see the longawaited move to 6000, give or take 50 points, occur very soon.

Around 6000 was a spike high formed when the market had a rebound on the move down from the 2007 high and again in April this year and early 2015.

I would expect some consolidation around 6000, which could be a sideways move or a slow pullback.

After consolidating around 6000, the next resistance will be the all-time high at 6850.

It would seem we are seeing the resumption of the long-term uptrend.

Last week I talked about looking for a buy signal from Big Un (BIG). That signal came in the form of a daily pivot point to the upside last Friday, after a three-day pullback on low volume.

As a result I bought 5000 shares at $1.735 for a total of $8695 including brokerage on Monday this week.

The initial stop is the recent spike low of $1.56 formed on October 5.

The initial target is $2.40, which is a projection of the pattern formed since July this year and also a spike high formed when there was a rebound to the upside in January 2008, with the price falling from $5 in 2007 to a low of around half a cent at the end of 2012. There is a good chance that after reaching $2.40 and consolidating, it may continue up to the old high around $5 – but we will have to wait and see.

Two of the six stocks in the portfolio had a pullback in the past week. Both Artemis Resources (ARV) and Altura Mining (AJM) appear to be pulling back and taking a breather before further moves to the upside.

ARV has targets of 38c and then 50c, and AJM has targets around 40c and then 50c. It will depend on how they behave at those levels as to whether they have the potential to move higher.

A2 Milk Company (A2M) reached its target of $7 on Wednesday and in the process formed a daily reversal to the downside, so now we will see how it behaves.

If it pulls back on reduced volume, it may form another higher spike low, which will then become its new trailing stop.

If it then reverses to the upside from this pullback, then a new target will be able to be projected.

Now to Lynas (LYC), which has announced it is going to consolidate its shares on issue.

This consolidation will take place at the end of November when every 10 shares will be consolidated into one share, and it is anyone’s guess what the share price will do post the consolidation.

I will watch its price action closely.