This could be an ex­pen­sive les­son

The Observer - - NEWS YOUR MONEY - DAR­RYL MOR­LEY

THE All Ords, ASX 200 and the SPI fu­tures con­tracts all had a rel­a­tively calm week last week – with all end­ing the week slightly higher than the week be­fore – and the SPI was still trad­ing at a premium to the ASX 200, in­di­cat­ing all was look­ing good.

How­ever, all three closed on Wed­nes­day slightly lower than last week’s re­spec­tive lows. The SPI still re­mained sev­eral points above the ASX 200, in­di­cat­ing to me the mar­ket was still pos­i­tive.

The only stock in the port­fo­lio that closed higher on Wed­nes­day than the pre­vi­ous week was Aeon Met­als (AML).

Australian Mines (AUZ) was square for the week.

The bal­ances were all lower and some still be­low their listed stop lev­els.

I am still hold­ing most stocks de­spite some hav­ing bro­ken their stops, as I am still work­ing on how I want to place stops when stocks have moved in a tran­si­tion­ing mar­ket and volatil­ity causes quite large moves both up and down.

If it turns out the stocks in ques­tion do not re­cover, it will be an ex­pen­sive les­son and teach me to take profit in all cases when tar­gets are reached – even if higher tar­gets are pre­dicted af­ter con­sol­i­da­tion.

The three stocks I noted as be­ing watched last week are still in play, but I have not bought them as yet as two of them have pulled back with the rest of the stocks I am hold­ing.

But I will look to buy if they re­verse the slow pull­back and form pivot point buy sig­nals be­fore break­ing sup­port.

Rim­fire Re­sources (RIM) is the only one to have moved up from its re­cent low, but will need to close above 3c for a daily pivot point to form.

I will try to ex­plain why and where some stocks that are held will likely re­verse the re­cent moves down from their re­cent highs.

The A2 Milk Com­pany (A2M) has been slowly mov­ing back from its $8.05 high on re­duced vol­ume for the past two weeks, and I am ex­pect­ing it to be­gin the next move up be­fore it reaches its strong sup­port around $7. It might have re­versed on Wed­nes­day and if that was the case then it should be con­firmed by to­day.

Big Un (BIG) has pulled back from the strong move up on Novem­ber 29 and it too may have re­versed that pull­back. That also should be con­firmed by to­day.

Queens­land Baux­ite (QBL) had a big move up to 9.7c over the past week and re­versed on Tues­day be­fore clos­ing on Wed­nes­day at 7c.

It seems to have found sup­port around 6.5c, where it re­versed on Wed­nes­day, and if this is the case then I ex­pect the next move should see it reach its next tar­get around 13c.

The re­cent spike low of 35.5c will be the crit­i­cal level for Al­tura Min­ing (AJM).

A break of that level would likely see it fall to the next sup­port at 30c.

Artemis Re­sources (ARV) was sold yes­ter­day af­ter it broke be­low 27.5c.

Past col­umns, in­for­ma­tion and DVDs on my meth­ods are avail­able at the­day.trader@news.com.au

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