Juggling. Fri Mar 20

Having bid up financials madly over the last week or so investors' focus has now moved to inflationary hedges as gold, oil and base metals rally and the US dollar continues to fall. So far today, at 11.15am, the result has been a stalemate with the market down a few points as materials rally and financials fall.

My positions are going reasonably well with the 2 gold stocks firm as well as bsl and ctx. Aoe, an energy stock, is surprisingly weak while fgl is flirting with 517, the low it reached earlier in the week. My stop is at 510 as I think that primarily it's range trading but I'm not too excited about the trade's prospects.

Unless fgl and aoe weaken sharply today, I won't be stopping out of anything. The next question is whether I should take any profits in the other positions but at this stage none of them are showing signs of topping out on an intraday level, such as confirming or suggesting lower highs. If they were to, I'd consider selling a portion out. The other cases where I could sell out of part of a trade might be if there was a wild move in my direction or if the stock hit a target.

I was thinking that 3400 would be a conservative target for ncm and it's trading at 3407 having been as high as 3434 but the daily chart, below, implies higher levels.

I've been running through the stocks in the top 100 index and can't see an opportunity to go short. Bhp, if it were to turn around next week, could suggest a lower high but that seems unlikely given the inflation hedge idea gaining ground.

There are two stocks that have cropped up over the last couple of days as potential buys. The first is Tabcorp, tah. The chart shows a stock that has lost all momentum on the downside. It made a marginal new low (by 1 cent) of 605 in late Feb and is shaping up to pivot through last week's high of 644. It's clearly in a trading range so not super exciting, but the top of the range is near 700 and it might make a straightforward low risk trade.

The daily chart shows that while tah is in a tight range there is a series of higher lows and a fairly flat top. There have been quite a few strong white candlesticks lately followed by mildly drifting pullbacks. For a stock that has low volatility there could be a sharp little move up.

Orica, ori, has also piqued my interest. It pivoted through 1354 last week and confirmed a higher low earlier this week when it ran up through 1430 to 1472.

I'm not keen to chase the market where I've missed the entry point but a look at the daily shows that ori is behaving bullishly with sharp moves up and slow corrections. I'm hoping that the current pullback might take the stock down towards 1300 giving me the opportunity to buy on a bullish daily set up. It might show up on the weekly anyway if it's slow enough.

12.28 Decided to stop out of fgl at 516 rather than use a wider stop at 510. Another look at the weekly makes me think that if fgl falls through 510 it might fall quite sharply so I'd rather just get out now. I've also sold out of a small amount of ncm at 3396 and bsl at 256. Ncm because it was stalling at 3400 and bsl because I'm not completely convinced it's hit a short term low so I want to sell small amounts into the rally.

3.28 I've been having a trawl through the penny dreadfuls and there are a few promising charts. I try to filter for volume so as to avoid wasting time and also to find stocks that others are using as trading vehicles. This is Flinders Mines, fms, a small iron explorer. After a big run in January there seems to have been a shallow correction with a resumption of strength this week as the stock broke through 6 cents.

I like fms, which I've bought at 6.3, because the daily has made a second recent buy signal after initially pulling back below the 6 cents level.


4.07 Approaching the end of day matchout my positions in aoe, bsl, and ctx have drifted off a little through the afternoon as the index sits towards the low of a day with a narrow trading range. It looks like lgl and ncm, the best movers on the day, will finish reasonably strongly. I'm off to yoga so that it's for the week.