Archive for November, 2009|Monthly archive page
today – tol short
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tol short position
TOL: Opened a short position in Toll Holdings today at 8.00. I wrote this up a tad in yesterdays post, entry based largely on the black candle formed on friday – an effect it appears of the Dubai situation.
The Dubai situation seems to have been a flash in the pan, however it does look to me like it shows the quickness to react of the markets to shock – a bit of a shock and the market drops 3%. The 3% was basically recovered today – however I haven’t looked in detail at the stocks – I can’t say whether the 3% was put back on the same stocks that lost it – and that in itself will be worth knowing.
Either way, a small position to test the market for shorts. The recent price action could almost be said to be a head n shoulders, although not as nice as you would see in a text book. Lets see how this plays out.
today – mcc – other notes
mcc close
MCC: Closed my position in Macarthur Coal today at 9.33 for a 9% loss.
Closed as the share made a lower high, and definite weakness has shown since the long term high was made when I entered the position. Looking at my entry when I opened the trade, I did note that momentum appeared to be dropping over the last few months – which seems to have held true this last week.
In general the market is struggling over the last few sessions as seems to be getting a lot of write ups around the traps. Time for me to look harder at my recent trades and trying to find some improvements.
When looking for improvement, there are heaps of resources to read, study and analyse – both in my library, the internet, the bookshop and of course examination of the charts I pay data subscribers to maintain. Reviewing past trades is a great place to start. Looking at the blog by the Trading Goddess there is a posting with ‘10,000 hours’, which describes the skills the greatest traders have – read it here. 10,000 hours is a term describing the number of hours it takes a person to learn a skill. This is a concept used by Mr Bighit at 5000 trades.
Review an earlier trade
Toll holdings revisited
TOL: recently exited, and I mentioned that I would review the trade with a view towards re-entry.
So I was looking at this recently in terms of breaking through the resistance at the tree recent tops. A few more days of data and the graph looks more like we’ve had a head and shoulders, at the top of the recent rise – and the last days trade is a break of the neck-line. Head and Shoulders or not – we have a lower low, lower high – so downtrend emerging. A look at the momentum shows that dropping also.
All in all – I closed the last entry stating that I still believed my original analysis that I entered on and was looking to go long again. Looks like the bears have this one, and shorts are the way to go.
The ASX 200
XJO - ASX200
The graph above is the ASX 200 as of friday. This does look like a change may be developing. I have followed these rising curves for a while now, however looking at the last day or so – we might have fallen out of the third rising curve… which whilst not meaning much, is a tap on the shoulder for me… lower lows, lower highs, change in character.
I note I have hit another stop over the weekend, and I am very close to a few others. With the US market being down 2% on friday, I suspect I’m about to get hammered. Shorts may be the way to go.
Know yourself
I have now done a search over my recent trades. You can tell I have been a bit lazy (in effect anyway, busy on non trading activities) as I have been trading what I can best describe as a small share universe. I am in and out of the same shares fairly constantly lately.
Possibly because of the ‘easy market’ we’ve been tracking since March or so…? Ease seems to have bred complacency in me. I’m not scanning the whole market – I’m going with what I know. Looking through a lot of charts today, I am trading sections of the market, and the upward trends and volatility are happening elsewhere.
So – know thyself – recognise the laziness coming into the trades, and plan to fix it. I can’t speak for the future – I may keep going as I am going until I get a chance to sit down and change direction, or I might just wind back the market commitment until I can get time to review the whole market and picking an area (and a direction) to chase.
Wrapping up
In summary – a rambly sort of post, covering a few areas. The rambly nature itself probably indicates my distracted nature at the moment. Sooo many distractions, Christmas shopping, major project on the go at my real job, getting used to new charting software.
Anyway – if anything here is of interest please post a comment below, or feel free to subscribe!
today – ALL
all close
ALL: Closed my position in Aristocrat Leisure today at 4.08 for an 11% loss.
Bought the share after a bounce thinking it would continue to bounce – however price fell, until today it passed the previous low, so time to bail. Lower low = down trend… always did, always will.
WTF: Had an entry trigger fire at close of market for Wotif.com and a buy order placed. The position was pulled as I had insufficient funds (due to purchase yesterday) so this trade did not eventuate. This would have pyramided me into WTF, so I might keep an eye on it and take an entry tomorrow.
Noticing today a few of my trades are not holding ground. Me thinks I need to do some self analysis on the weekend to see whats going on… Is it me or the market?
today – close tol, open aqp
AQP entry
AQP: Opened a position in Aquarius Platinum today at $6.64.
Entered the position is the share has made a new high, and if previous history is anything to go by (and when trading on a technical basis there is nothing else to work with!) this share will be volatile, and can move significant distances rapidly. In this case I have gone with a stop loss that is spaced a bit further than usual, as I don’t want to get ‘bounced out’. Lets see how this one goes.
tol close
TOL: Closed my position in Toll Holdings today at 0.22, for a 10% loss – this was in the warrant tolwmb.
As you can see, the share has bounced off resistance 3 times now, so its hard to say how this share will continue. For my analysis on entry see my writeup here. I still have confidence in my original analysis, so I will look into how to continue this trade – subject to conditions of course. Every trade has to be a discrete event. I will look at my options around entry based on warrants / options or CFDs – however I wont say much now as I don’t have the time to research this next entry as yet… tomorrow maybe…?
The exit was taken today as the warrant was due to expire in 2 days, and I really don’t want to get caught looking to exercise a warrant. A 10% loss on a warrant is not bad at all, given the leverage I was playing with.
Remember – stick to your stops!
today – open jbh, close iif
jbh - system A open
JBH: Opened a position in JB Hifi today at 22.78.
As noted in my last post, my System A has fired an entry in JB Hifi. System A is a medium/long term trend following system, that has so far only triggered on two stocks in the last 6 months. The system is only scanning the ASX200 at the moment – I really do need to sit down and tweak the system to scan other markets – but I haven’t done that yet.
I have no issues at all making this entry – this is one of the smoothest up trends in the market.
iif close - very late!
IIF: Close my position in ING Industrial Fund today as 0.45 for a 13% loss. This has been a bad trade, and exploits a gap in my system. As noted in other posts, I haven’t clearly planned what I will do when a company does a capital raising. That said, the recent capital raising in Campbell Brothers treated me well – a feat I was hoping to happen again in this share.
But it wasn’t to be. In the diagram I have drawn three circles – 3 exits I should have taken.
The obvious question is why did I exit today? Well, with the price drop thursday, the price of the share dropped below the price at which I could buy more shares from the capital raising – that can’t be good. The companies attempt to raise funds will result in selling me shares dearer than I can get them on the market. So – someone else can have my shares – trade closed.
Anyway, a few more stops being toyed with, so I’ll keep going with closing those positions…
weekly notes, system A results
Just a brief note tonight. Performance over the last week has not been ideal, however I have been in a sort of caretaker mode for the last few weeks, as I have a few things on:
- Getting my head around new share charting / analysis software (Amibroker)
- Managing current trades
- My actual day job – very busy lately, in the process of winning a major project – very stimulating
Its been important to stick to stops in these quieter times, and when doing my portfolio update for tonight (posted a few minutes ago) I note that I missed an exit Friday as I didn’t check Thursday night because of work. So – my salary job has cost me my trading $$!
This weeks System A report showed up two entries: ASX:CNT, ASX:JBH. I will enter a fresh position in JBH based on my system trigger this week.
today – open wor
wor open
WOR: Opened a position in Worley Parsons today at $27.25. Looking for a bounce on the climbing trendline.
I intended to get in on the bounce about a week ago, but missed the chance. Entered todays position on the market open.
Its a down day and slightly below the trendline, so this might be a short trade. Also there is a resistance zone a little above. Lets see how this goes.
today – open mcc, close cpb
mcc open
MCC: Opened a position in Macarthur Coal today at $10.20. The share made a new high for the year when I was entering, but has since subsided into the close of the day. Volume was good today (double yesterday), so all in all a reasonable looking entry.
Counting against this entry is the observation that this share looks to have lost some of its momentum over the last 3 months or so – maybe this new high will change that… maybe it wont.
Campbell Brothers - 4 entries, 1 exit
CPB: Closed my position in Campbell Brothers today at 26.99 for a 15% profit by the time you take into account all the entries I made when pyramiding.
You can see in the pink circle the effect of the capital raising, which has stalled the price action in its tracks. The fourth entry, shown as the low down green blob is the entry point of the shares collected via the capital raising.
Fairly straight forward trade, stuck to the plan for the first bit, a momentary panic when I had to think how I would react to the capital raising, and then (new plan under the arm) I traded the second half according to my updated plan.
To date I have not updated my plan with how to deal with this situation, as I wont hit it too often, and looking at a few over the years, I have had some capital raisings that have treated me well – and some have been a disaster. You can see above the plan in this case simply involved resetting my ATR based stop loss when the price stabilised.
system A fires – first time in ages
My trend following System A fired for the first time in ages today. And it only came up with the one – Centamin Egypt (CNT).
Centamin Egypt - System A
Looking at the chart, it is not what I’d call an ideal entry!
CNT is climbing a rising channel, and is just on the bounce from the top of that channel.
There are a couple of reasons I am going to skip this first entry from my system:
- I can’t get it on margin, and cash reserves are light
- It looks like its about to dip, so going short might make sense – but this stock seems unborrowable – so can’t short it.
Anyway – now that the system has fired, I expect a few more options to arise over the next week. For more about System A look here.
today – open okn, all
Oakton pyramid entry
OKN: Pyramided into my Oakton position by increasing my holding with a purchase at $3.78.
It looks like my earlier entry tookthe bounce cleanly which is already encouraging. This has hiked my stop loss as can be seen in the diagram, which lead to me increasing my holding. Three white candles is generally fairly bullish, and the market over the last few days has been strong. Now to sit back – and follow the plan!
all open
ALL: Today I took out another position in Aristocrat Leisure at $4.60.
The last position here lost me 6%. Nup – I don’t reckon I’m chasing the share to get even for my loss – but you never know exactly what the subconcious is thinking!
The entry is clearly again based on the break of a downtrend, which happened yesterday with the formation of the big white candle. My plan was to get in on a rising share today, but it appears that the latter days trade was not in my favour – there is a dark cloud across the price chart. This is not normally a strong signal as the main candle body is well above the close from yesterday. Un inspiring volume though… hmmm listening to my words here I don’t feel strong about this entry – but never the less – in now, so stick with the plan.
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