tradersams blog

aru entry

ARU: I opened a position in Arafura today as tweeted earlier.   From the diagram you can see I entered based on a bounce on the upwards trendline at the Green arrow.   I picked the entry during last nights chart viewing, and its a share I traded recently after finding on my brokers live heat map.  The volume has been high – especially around the time of the last trade.

Reasons for entry:

• bounce on trendline
• appeared to start recovery a day or so earlier than other comparable shares
• active sector
• high increase today

Reasons counting against entry:

• I have entered just shy of an earlier area of resistance, so may have limited potential
• Not very high volume today
• I’m unconvinced about market direction (however today was a good day!)

Lets see how this one plays out.

Onto other matters.  Generally when trading, I have come to accept that I am not that good at correctly reading the interpretation of macro changes in supply and demand – I figure those much smarter than me do that, and many others really just have an opinion 😉  If its a fact, its not debatable – anything else is an opinion!  Taking that into consideration I came away feeling educated after reading this article from MyStockVoice on the building of a massive oil pipeline across Europe.

Turkey and four EU member states have signed a historic deal in Ankara allowing work to start on the Nabucco natural gas pipeline, which is aimed at allowing the European Union to tap directly into non-European gas reserves.

Its when I read things like this that I become aware of my limitations regarding picturing the long term outcomes of such activity – yup I realise some observations are clear, but, again – just my opinion.

So why mention this?  Really, thats why I revert to technical analysis of shares and other financial vehicles, because it simplifies my thinking process so I can make decisions, and move on those decisions.

Till next time…