Chart Watch 2007-04-02

Long delay since my last real post. Like most people I've had a extremely busy couple of weeks with weddings, family, football and work. Currently getting ready for a trip to Dallas so the next couple of weeks are not going to get any better.

A couple of my holdings are currently at areas of interest so I thought I would post their charts.

Industrea - IDL


Industrea is a stock I have been following for a while now. It has been on a consistent, strong uptrend and formed a strong hammer on the 28th of Feb when the market had its first scare.

Last week IDL traded between $0.40 and $0.41 but today along with the all ordinaries has closed down currently trading at $0.39. Nanine posted late last week that she has sold her holdings.

Albidon Limited - ALB


Albidon Limited is a minerals exploration company that has benefited from the recent increase in nickel prices. As the chart shows, ALB has seen on a strong uptrend since mid January and I took a position in ALB a couple of days after the correction at $2.19 on the 7th of March. ALB has since surged to a 52 week high of $2.77 and closed today at $2.66.

I will keep a close eye on the lower trend line, count back line at $2.48.

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My Yahoo Ticker

Although it's been available for a while now, the My Yahoo! Ticker Beta is an option for people wanting stock news and quotes fed to their desktop.
Quotes and headlines are delivered direct to your windows task bar allowing you to continue working while maintaining contact with the market. RSS feeds can be setup over a range of topics, not just finance. Email notifcation, weather forecasts and more are also provided. There's also some search capabilities built in.

Another option is Yahoo! Widgets. With Windows Vista now released with a built in SideBar, Yahoo! Widgets may be a thing of the past. Windows XP can gain the benefit of dynamic applets to run on the desktop by using Yahoo! Widgets. Like the stock ticker option available from Yahoo!, finance isn't the only widget available. Widgets include RSS feeds, weather, email, system performance and 100's more.

Having data directed to your desktop can be extremely useful for people spending their days if front of the computer, but are too busy to scan the web to search for data they are interested in.

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Stock Trader TV

I new beta web site is available for viewing called Stock Trader TV. It's an interesting idea that extends on Alpha Trends and You Tube.

Looks like they have a few high profile sponsors so it will be interesting to see the first Australian trader to provide video trading commentary in a similar style.

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Google Finance

Google has revamped it's finance page. Although clearly targeted towards the US market a useful feature of the redesign is the addition of You Tube. Daily videos are made available from Reuters, Forbes and other media outlets.

You Tube is becoming a useful tool for people interested in world markets with videos available about forex, equities and business dealings.

It would be great to see more offerings for the Australian market in the near future.

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All Ordinaries Three Inside Up Pattern

A Three Inside Up Pattern occurs after a 2-day bullish harami pattern. To form the Three Inside Up pattern, the third day is a white day with a higher close than the second day. The three inside up pattern turns a low-reliability bullish harami into a high probability reversal pattern.

The All Ordinaries have formed this pattern on the last two pull backs in the recent uptrend. The current pullback has again formed this pattern? Is this candlestick pattern and indication of a strengthening XAO?

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SA Referendum on Nuclear Power

The backflip occurred quicker than anticipated. Mr Mike Rann, The South Australian Premier, has declared he wants a referendum on the issue of nuclear power for South Australia. This comes after a week earlier saying it would be an "all-round disaster" if a plant was built in his state.

Mr Rann told Australian Nuclear Energy Pty Ltd, the private company behind building the proposed nuclear power plant in Australia, that "My message to this company is 'you've got zero chance of building a nuclear power plant in South Australia; you'll have to look elsewhere'.". Now Mr Rann wants a state referendum on nuclear power if the Federal Government moves to override state bans on nuclear power plants.

Given the fact that the nuclear power industry has a history of accidents and the people who suffer most if an accident does happen are those living closest to the nuclear power plant, it is logical that decisions concerning the construction and operation of reactors should be taken by public referendums. Dangers have been reduced, we are told, with advanced technology, but the fear remains.

I think both Mr Rann and Mr Bracks (Victorian Premier) have made the correct decision in allowing the public to speak. An earlier decision by Mr Rann would have improved is credibility, but I'm pleased he was strong enough to reverse his decision. Speculation on 5AA, a South Australian local talk back station, that this announcement of a referendum is to divert attention of the job losses of hundreds of Holden workers in Adelaide northern suburbs could have been avoided and demonstrated a stronger government to the South Australian voters.

South Australians are after a strong leader, and both the current government and opposition party are not providing it.

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Conquest Mining Limited

Didn't realize CQT was in a trading halt, so this one is a hold in the ASX Opportunities until it comes out and we see what direction it takes...

Current stop loss is at $0.795, last close at $0.81.

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Market Direction

The psychology of the market has shifted, highlighted by The Stock Bandit in a post titled When Bulls become Sellers. Its an interesting post about the current market conditions and how traders change direction in uncertain times.

"Those same bulls are now much more likely to become sellers into bounces. Will they sell at the first sign of higher prices? Yes, some will. Will some of them try to endure this pullback but eventually capitulate and flee for the safety of cash? Of course."

Motivations and confidence in the market have altered. The bulls can't afford to be bullish all the time and a safer direction has to be taken when conditions around you change. Looking at the chart I posted yesterday, corrections occur and until the bull becomes a bear these conditions need to be traded as such.

Beginning of a correction, the rumblings of a bear market or a mere blip in a bull market are all possibilities. Most views that I have read point towards the bull returning and fear of the bear seems to be at a minimum.

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Chart Watch 2007-03-04

Along with the All Ordinaries, the handful of stocks I have been following have taken a hit this past week. I agree with MATT O'SULLIVAN - SMH article. I'm anticipating further declines but still old a bullish view overall. The market needs to have a shake out to keep investors and share prices inline. With that view CFX, CQT and IDL are being stopped out. We will continue to follow CHC, as it has been the standout performer of the list, and well above it's stop loss.

Below are two charts that support the view that the fall last week looks healthy, and that if it is a correction it has further to fall.





So how are other traders handling the current conditions? Right now I'm cashed up, looking for good buying conditions. I've found this correction profitable so far, having made 2 three day trades with IDL and EVE. I bought both for the same reason that they had both been sold off too much. Other traders took the same view with both stocks rebounding strongly the past couple of days.

Finding strong up trending stocks will be tough, but we'll run the scans early this week and see what is returned.

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Chart Watch 2007-03-01

EBI didn't recover today with a close at $4.40. EBI had an intraday high of $5.25 on the 26/2/2007 and the trend has definitely broken. I highlighted this one as an ASX opportunity looking weak after yesterdays sell off. I'll wait until Monday before deciding on the others that closed below our stop loss.

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Market Glitch?

Below is an image from The Wall Street Journal that shows the data glitch that occurred, causing the sell off to look more dramatic then it really was.



The US market revived as Federal Reserve Chairman Ben Bernanke soothed markets, increasing investor confidence at least for the short term. China, The Dow, S&P 500 and Nasdaq Composite Index were all up yesterday and the ASX is expected to open higher following these recoveries.

"Strategists expect a correction of between 5 and 10 per cent over the next four weeks - similar to that in May and June last year - but emphasised the market's bull run was far from over because the fundamentals remained intact." SMH

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Close 28th of February

The All Ordinaries closed down 2.45% or 148.1 points, matching the losses of China, US and Europe. Although IDL and EBI closed below our stop loss I'm inclined not to recommend any sells until we view the close of US market tonight, but EBI is a possible sell based on its close.

We noticed a lot of the ASX opportunities closed higher from the early sell off, with CHC the only stock closing higher than its open reaching an intraday high of $3.01.

There are bargains to be found in these market conditions that fit both a technical and fundamental strategy, but new positions should be made with caution as market conditions could show more volatility.

EVE is one stock that fits our criteria of entry recently pulling back to $.315 the recent high yesterday of $0.40.

Good luck to all over the next couple of days and please check out Trader Feeders post on what usually occurs in the US market after a 3% loss in one day.

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Dow drops 416, ASX drops ?

How is the market going to react today. The DOW dropped 416 points (3.29%), with as much as 546 points during the days trading before recovering. This was the biggest days drop since the Sept. 11, 2001, terrorist attacks.

Trader Mike discusses how traders on the floor alleged bad data with "some sort of technology bottleneck was responsible".

The ASX will be looking at a similar drop based on other markets throughout the world. The NZX 50 as of 11am local time was down 3%.

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Chart Watch 2007-02-24

Added yesterday as an opportunity, CFX reached an intraday high of $2.50. Our stop has been moved one cent higher to $2.40.

Charter Hall - CHC



CHC has been very active over the past couple of days after the release of the first half results which were very encouraging. NPBT increased from $7.8m (1H FY 06) to $16.7m (1H FY 07). A complete list of key activity is outlined in their interim results presentation. Our Stop loss has been moved up to $2.44.

Conquest Miming Limited - CQT



After retracing back to our stop loss of $0.79, CQT has had a couple of higher days moving our stop loss up slightly to $0.795. Long term group still has good separation, and the short term looks to be turning up.

Everest Babcock and Brown Alternative - EBI



Looking very strong, EBI made an intraday high of $5.23 yesterday. Our stop loss has been moved up to $4.95. Separation between the long and short term groups is a nice consistent uptrend with little fluctuations.

Eastern Star Gas - ESG



ESG has been looking weak for the past week and has now closed below our stop loss. The short term and long term groups both are not displaying up-trending characteristics and an exit should be made on Monday. A fund raising was announced during the week at $0.275, which coincided with our stop loss.

Industrea - IDL


CFS Retail Property Trust - CFX

The stop loss for IDL has been moved up to $0.37. IDL's half yearly report was released during the week with the key stats being "Net profit Before Tax up $7.4 million for six months to December 2006" and "Upgraded full year earnings guidance by $2.6 million to $14.9 Million". A lot is happening at IDL and I see further potential in this companies share price.

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Chart Watch 2007-02-23

CFS Retail Property Trust - CFX



CFX looks to fit our entry criteria. Reached a high of $2.51 on the 13th of February and has since pulled back to $2.45. The count back line looks to be a good indicator for CFX without a break in the past couple of months. Volume is consistently high and with an entry now we can gain a tight stop loss.

Entry $2.45, Stop Loss $2.39.

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Alpha Trends View on Gold

Alpha Trends has a great video on the US ETF's available for gold.



Posted below is the chart ASX:GOLD which allows Australian traders easy access to the gold market




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Three Inside Up

A three inside up pattern occurs after a 2-day bullish harami pattern. To form the Three Inside Up pattern, the third day is a white day with a higher close than the second day. The three inside up pattern turns a low-reliability bullish harami into a high probability reversal pattern.

Mikoh Corporation Limited - MIK



MIK has pulled back from it's high of $0.48, contracting the short term group. The long term group looks strong with good separation, with the count back test showing it hasn't been broken since the start of November.

MIK formed the three inside up pattern on the 15th with a white candle closing higher than the second candle of the bullish harami. On the 16th MIK closed at $0.45 with a 5.88% increase.

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Chart Watch 2007-02-16

Indusrea - IDL

Industrea keeps making new highs. Our stop loss again gets moved up, now at $0.35 which puts IDL into profit. For the fundamentalists there is a lot of infomation available about the IDL story, including an article in the Smart Investor. This information can be download from Industrea website

Eastern Star - ESG
is in a trading halt, keep on eye in the news if you can as the stock sits right on our stop loss.

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Chart Watch 2007-02-15

Industrea – IDL



Industrea stop again has been moved, now at $0.335. A close yesterday of $0.365 and and intra-day high of $0.375.

Bluglass Limited (BLG)



Bluglass closed below our stop loss of $0.545 at $0.54 yesterday. The trend is looking week and an exit should be made tomorrow. It looked like support was going to hold at $0.55, but the I'm not confident the short term group will respond favorably .

Charter Hall – CHC



We decided to stay in CHC, even though the stop loss was broken last week. The trend wasn't weak enough to exit. Looks like there is short term resistance at $2.50 and a close above will be encouraging. Stop Loss remains at $2.42.

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Cold Minnesota

My whirlwind tour of USA continues and I'm blogging from freezing Minnesota. Not my type of weather and looking forward to flying out on Sunday to Denver.

A lot of the ASX opportunities finished higher and Friday with IDL's stop moving higher.

Industrea - IDL
IDL reached an intra-day high of $0.35 closing at $0.345. Our stop has moved up from $0.31 to $0.325 based on the count back line.

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Chart Watch 2007-02-08

Everest Babcock and Brown Alternative (EBI)



Good spread between the long and short term group. Count back line has not been broken since uptrend started. Volume may be a bit low, and we have a tight stop loss defined. We'll add this as a trend opportunity, but we could have decided to watch the trading action over the next couple of days and I think we have a tight enough stop.
Last Close $4.75, Stop Loss $4.68.

Regional Express Holdings (REX)



Looks like a potential swing trade based on the Traders Action Zone.

Jubilee Mines (JBM)



Looks like a potential swing trade based on the Traders Action Zone. JBM has higher volume compared to other swing trades I have posted. I'm still in the process of testing this strategy for the ASX.

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Chart Watch 2007-02-04

Bluglass Limited (BLG)



Has had a great run in January, moving up from a low of $0.39 to a high of $0.61. Has just finished its first pull back and looks to be returning to its uptrend.
Last Close $0.58 , Stop Loss $0.55

Conquest Miming Limited (CQT)



Good separation of the short and long term moving averages, looks to have swung back to $0.79 and returning to its trend.
Last Close $0.88, Stop Loss $0.79

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Swing Setups

I’ve been doing a lot of reading on swing trading, especially the blogs of Trader Mike and Taz Trader. Taz Trader’s strategy really intrigued me especially about the area he calls the TAZ.

“The Traders Action Zone (TAZ) is a buy and sell zone on a chart that swing traders can use to identify possible reversals in a stock. This is just simply "area" that we look at to see if a stock that is in a strong uptrend, after pulling back to this area, will likely reverse.” TAZ

This area is located between the 10 sma and the 30 ema. For entry into a stock we are looking for specific pattern once in this area. We are looking for the first candle makes a low, the second candle makes a lower low, and the third candle makes a higher low. This will be clearer once you see the charts below.

I added this scan to the program I’m developing, Market Ninja, and came up with following charts. A new trailing stop needs to be developed as TAZ's exit system wont work for the selected stocks. Initially I'll just put the stop loss below lowest of the three setup candles.

This is just a learning exercise, so hopefully I have the setups correct. I think DMX might be the closest to the setup required as the higher low was below the 10MA. CIR had a close below the 30EMA, not sure if that counts that one out. TAZ Trader does mention he likes the pullback to be closer to the 30EMA and this was the closest I could find. Also be aware some of these stocks have low volume, and after doing some back testing don't perform as well as high volume opportunities, but we'll follow the trades anyway.

COZIRON RESOURCES LIMITED (CZR)



Last close at $0.80, Stop loss $0.74

DOLOMATRIX INTERNATIONAL LIMITED (DMX)



Last Close $1.17, Stop loss $1.08

KIP MCGRATH EDUCATION CENTRES LIMITED (KME)



Last Close $1.42, Stop Loss $1.37.

CIRCADIAN TECHNOLOGIES LIMITED (CIR)



This one has a slightly different setup, but we'll follow it anyway.
Last Close $1.70 , Stop Loss $1.66

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Landed in Miami

Well I've landed in Miami and unfortunately my luggage is still in Sydney. 8th trip in USA, 4th time my luggage didn't make it all the way with me. Hopefully it arrives tomorrow.

We had some good moves in some our opportunities.

Industrea – IDL
Closed at $0.335, with an intra-day high of $0.345 reached past two days. Stop has been moved up to $0.31

Eastern Star – ESG
Closed at $0.335 with an intra-day high of $0.35. Stop stays at $0.275.

Charter Hall – CHC
CHC closed below our stop loss on the 31st. Trend still looks in tact with the guppy MMA and I'm inclined to watch this one over the next couple of days instead of enforcing the stop.

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Super Bowl XLI

Well I'm going to be attending Super Bowl XLI this year in Miami. Flight leaves tomorrow. I'm lucky enough to have a job that flies me to the USA every 3 months or so to work in stadiums and arenas. Although I will be on-call during the game, most of the work is completed before hand so I'm hoping for a nice relaxing day watching one of the biggest sporting events in the world.

I should be back in 3 weeks time. Hopefully I will still have time to maintain Market Ninja, so keep checking. It's been a very down month so far but thats trading. If it was easy, every one would be doing it.

Here's to a better February, and go the Bears. My Chargers fell short this year in the play offs and will better for the experience next season, like my first month posting.

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AUSTIN EXPLORATION LIMITED - AKK

Well the bad run continues, AKK closing at $0.85 today below our stop loss of $0.89. The trend still looks strong, maintaining it's trend line.

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Eclipse Trader

Eclipse Trader is a free open-source charting platform available from http://eclipsetrader.sourceforge.net focused to the building of an online trading system. The standard Eclipse RCP plug-ins architecture allows third-party vendors to extend the functionality, providing developer’s an opportunity to extend the functionality of the application. Like many open source projects, the range of features relies on programmers providing their time and skills to develop the application further.

Eclipse Trader provides the user with a range of Technical Analysis indicators and tools. The feeds available are Yahoo! Finance, Open Tick and DirectaWorld. Level II feed available through OpenTick and Archipelago. Hopefully more developers come on board to develop other subscription-base date feeds, or interface with QuoteTracker.

Eclipse Trader has a useful feature to scan a stock and provide a list of key patterns including Gap Rules, Key Reversal, High / Low Reversal and many more.

A simple portfolio management interface is also provided as part of the platform. This system is very basic, and doesn’t provide a means to add funds or dividends, it only controls the buys and sells of securities.

With new releases available on average every 3 months, the development of the project is extremely active. Please check out the Feature Request page to find out new features planned for release http://sourceforge.net/tracker/?group_id=116488&atid=674949. Being developed in Java, Eclipse Trader can also be used on windows, Linux and Mac OSX systems. A lot of work is still required before Eclipse Trader can match the expensive charting applications, but I would recommend readers download a copy, and maintain an interest in it's development.

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AGLOCO

Bit of a detour from trading but I thought I would blog about a chance to help build AGLOCO – it is a Member-owned Internet community.

Here is why I would like you to help. First – it is free. Second - it is quick and easy to join. Third – AGLOCO’s purpose is to get its members their share of the money generated on the Internet (i.e. you make money). And lastly – if you help build the AGLOCO network you can make much more.

Here is a link to sign up (it automatically records me as referring you with my ID BBBN2567) http://www.agloco.com/r/BBBN2567

AGLOCO works with a toolbar type software called a Viewbar. Privacy is very strict so no spyware, popups or spam.

As to how much money you can make, there is a study which says the average user should get $5 to $15 a month. (But less at the beginning.)
Click here to read the report. http://simmonsreport.spaces.live.com

How much can you make helping to build the network? The Simmons Report predicts $30 per referral.

I have 20, but a friend of mine RZ McCall has over 8,000. He has a great blog site http://mccallsnotes.spaces.live.com.

AGLOCO is in their beta phase which is the best time to help them build out the network.

So please join now and help build the network. Have questions?

Their website has all the details so go there http://www.agloco.com/r/BBBN2567 or ask me.

Market Ninja

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Chart Watch 2007-01-23

Couple of good days with the ASX opportunities and we have some stops moving up based on our count back line.

AUSTIN EXPLORATION LIMITED - AKK



Closed at $1.015, up from $0.88 at recommendation. Count back line moved up to $0.85 from $0.79.

Industrea – IDL



Bounced nicely from the long term group, and stayed above out stop loss of $0.305. Current close at $0.325, but still below the $0.33 recommendation.

Eastern Star – ESG



Uptrend looks intact, stop loss still at $0.275, current close at $0.295

Charter Hall – CHC



This one keeps moving up. Stop loss has been moved up to $2.39, current close at $2.50

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Chart Watch 2007-01-21

AUSTIN EXPLORATION LIMITED - AKK



A Bullish hammer occurred on the 12th, which has a low reliability. It requires confirmation of the implied trend reversal by a white candlestick, a large gap up or a higher close on the next trading day, which occurred on the 15th with a bullish engulfing candle.

As we can see on the chart we have clearly defined trend line, spread of the long term group and contraction of the short term group. Current count back line at $0.79, close on Friday at $0.88.

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Mid January Review

MarketNinja has been up and running for around half a month so far. I thought it would be a good time to discuss some of the opportunities I have alerted readers to, and the dismal performance so far. I was alays nervous of this when starting this blog, hopefully this will turn around.

Charter Hall (CHC)
Added $2.25, stop $2.17
Current $2.40, stop @2.23
Made a good move on the 12th but has reached resistance at $2.40. Trend still looks string. Stop hasn’t moves into positive territory yet.

Eastern Star Gas (ESG)
Added $0.32, stop $0.275
Current $0.295, stop $0.275
Short term trend looked like it was broken and an intraday low of $0.25 was reached on the 11th. The short term group has since bounced off the long term group and has yet closed below our stop loss. Long term trend line still intact.

Industrea (IDL)
Added $0.33, stop $0.305
Current $0.34, stop $0.305
Has reached resistance at $0.34,

Riversdale Minerals (RIV)
Added $2.20, stop $2.07
Current $2.05
Closed at $2.00 on the 11th below our stop loss.

Sunland Group (SDG)
Added $3.66, stop $3.53
Current $3.83
Closed at $3.41on the 8th below our stop loss. Trend has since been restored providing another entry into the stock.

Envirozel (EVZ)
Added $0.41, stop $0.385
Current $0.38
Closed below our stop on the 17th.

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Envirozel Limited, EVZ

Envirozel Limited (EVZ) closed below our stop loss today of $0.385. Exit tomorrow.

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QuoteTracker Review

QuoteTracker is an extremely useful application if like me you sit at a computer all day and love watching price action. QuoteTracker interfaces with various data feeds, brokers and financial sites to provide you with real-time streaming data. Some of the feeds are delayed, but if you have a comsec or e-trade account you can put in your username and password and it will extract real-time data.

Live intraday charts are a useful feature, not only displaying the price action in real time, but allowing you to apply indicators and trend lines. You can also display a historical chart. The indicators available are limited but the application doesn’t claim to be a replacement for your current charting application but are always being improved.

Being able to sort a list of stocks by various variables including percentage gain and volume improves speed of finding trading opportunities compared to your brokers watch list page. Multiple watch-lists and portfolios can be maintained.

QuoteTracker can also be used is provide data for trading applications such as Amibroker (requires QuoteTracker registration). QuoteTracker provide s real-time data to these advanced charting applications, allowing you to screen and chart without the need for purchasing expensive live data feeds. If you are relying on 100% guaranteed data, QuoteTracker isn’t a replacement.

The depth of the program is amazing for its price (free) and I’m continually finding new features to try out. Since an e-trade account is free, QuoteTracker is free, obtaining real-time data on your desktop couldn’t be cheaper.

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Chart Watch 2007-01-14

Alliance Resources (AGS)


Alliance Resources (AGS) is an excellent example of Guppy Trend Trading. From its initial breakout from around 30 cents, Alliance has provided only two exits signals using the count back line as exit ($0.75 and $1.69). The exit signal that occurred at $1.69 was when a JORC result was delayed, now due early 2007.

AGS has provided re-entry signals at $0.80 and now it looks like a new entry signal is being provided. This week we will be looking for the short term groups of Guppy MMA (specifically the 3, 5 and 8 EMA) turning upwards indicating traders are re-entering the stock.

I like using AGS as an example of why traders shouldn’t be afraid of stocks that are continuously making new highs.

Envirozel Limited (EVZ)


Envirozel Limited (EVZ) has not provided an exit signal all the way up from its breakout at around $0.16. Long term group show s a nice constant spread, short term group demonstrating healthy retraces towards the long term group. Current count back line at $0.385, close on Friday at $0.41.

Indestrea (IDL)


Indestrea (IDL) keeps maintaining a constant spread between the short and long term groups. Healthy retraces occurred along the way, with the pull back on the 2nd of January of most interest testing the short term group, reconfirming the trend. Current count back line at $0.305, close of Friday at $0.33.

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Chart Watch 2007-01-11

Riversdale Mining Limited (RIV) closed below our set stop loss today. As part of our trading rules we should look to exit tomorrow.

Reconfirmation of the trend if the 3, 5, 8 EMA start to turn upwards over the next coulple of days. If you look close to the end of November this was the case.

Traders with positions should close as per our trading rules. Reconfirmation of trend can signal a new oppotunity of entry and RIV will stay on our watch list.

Eastern Star (ESG) again closed on our stop loss.

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Joining Trend

I’ve been reading a candlestick trading book and when I reached the end I was extremely disappointed. The book discussed the full range of candlestick formations, and the psychology behind them but it didn’t discuss how to trade the setups. No entry, exit or failure rules were defined.

After coming to this conclusion about the book, I realized this blog has missed an important step on how I trade. I blogged about an entry in ESG that was possible when it bounced above the count back line, but that isn’t a situation I have ever traded or will. The count back line isn’t intended to be traded this way. Trend trading isn’t about picking bottoms. It’s about joining an established trend, or joining an established trend after it has re-confirmed continuation.

Joining an established trend is an easy scan using MarketNinja or most scanning programs. I look for consistent separation of the short and long term Guppy MMA. I then look for an entry with minimal risk, which is close to our count back stop loss and provides me with minimal risk.

Joining an established trend after it has re-confirmed continuation (pullbacks) is about waiting till after the short term group has contracted, and indicators show the 3, 5 and 8 EMA’s are again separating. This provides more confidence that the trend is intact an entry is available at less risk than guessing the trend will continue.

Trend trading is about using our defined indicators to determine entry and exit of all trades. Using each indicator as its intended will provide the most profitable results. I hope to has some examples of each of these setups in coming blogs.

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Eastern Star, ESG

Late seller closes ESG on our stop loss (0.275), but not below. We also had a intra-day low of 0.27.

Short term trend was broken today, long term still looks intact. If it looks bad tomorrow I'll be looking for an exit.

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Eastern Star, ESG

Entry opportunity provided today for aggressive traders with ESG falling below our stop loss and rebounding above. 0.285 available at of time of posting. This provides an opportunity with a close below 0.275 as our stop loss.

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Market Ninja

First screenshot of the work in progress Market Ninja.
The scanner, Market Ninja, is designed for me to easily download EOD data for the ASX and create scans to filter this data. There is still a lot of work to be done before it is ready to be released (freeware), but is currently in a usable state for my purpose.

The idea of the scanner is to load data into columns. This is currently configurable through editing a text file but will be added as a dialog. The current columns supported are only the basics (open, high, low, close, MA, EMA, Volume, Average Volume) with more functions will be added as required. You have an unlimited amount of columns you can create.

Once the columns are defined and loaded, a complex filtering system is available. Greater than, less than, equal to, between, in, not in and many more conditions are available to be applied to a column. This allows you to reduce the data returned by a set criteria without requiring the data to be re-loaded and scanned. This improves speed of changing filter settings over scanning solutions. The filter setup for scan is automatically saved with the scan so it can be re-used next time the application is run.

My aim is to also have available a chart below to the scan results to quickly display the current chart with a few indicators applied. This will speed up my scanning process before investigating the stock further in a more advanced charting application.

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Sunland Group, SDG

Sunland Group (SDG) closed below our stop loss of $3.53. The rules say exit so out we go tomorrow.

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Compass Resources, CMR, 2007-01-08

The ascending triangle pattern was broken today with a low of $5.35 reached.

This swing low was equal to the last swing braking the ascending trend line.

It is still interesting to se ehow this plays out.

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Money Management Calculator

Managing risk is an important step to becoming a successful trader. To help manage risk we need to determine our entry price and stop price. Once these two values are known, we can determine before we enter a trade what risk we are willing to make.

To help calculate my positions, I use a free position size calculator. This calculator allows me to calculate the amount of shares I require to own to risk a set portion of my portfolio value.

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Stock Wrap Express Charts (SWEC)

Created by Ayamae, Stock Wrap Express Charts (SWEC) is a free charting, scanning and portfolio solution suitable for most traders’ requirements. The functionality provided is comprehensive compared to other solutions available on the internet. Ayamae are very pro-active with bugs and feature request and also maintain a wiki. They seem to understand that providing feedback, good and bad, is the best way to encourage the use of their product.

Charting
Currently supporting 16 exchanges and over 100 Tools and indicators, SWEC provides traders with all the data and features provided by more expensive solutions. I have currently been using the charts created for my blog, as I find them attractive and clear to view. The idea of saving workbook’s of charts is extremely useful when trying to maintain different lists stocks.

A few simple features is still missing, but have been added to the forum as request. These include specifying the color of indicators and applying pre-defined templates to charts. Until these are added, the speed of charting is a bit slow for me as I require sometimes close to 13 indicators to be added to every chart I want to view (mostly moving averages).

Portfolio Management
The portfolio management provides the basics of functionality for this task. I really like the summary page, providing a quick view of each portfolio created with key statistics. The speed of adding past trades to a portfolio are greatly improved over other portfolio management solutions as SWEC automatically fills in the closing price of a stock when selecting a past date.
More reports are required before I will continue to use this as my portfolio management tool. A position size calculator would also be handy.

Scanning Manager
Currently providing 65 customizable scans, SWEC provides the basics scans for a lot of popular trading strategies. Examples include MA cross over, candlestick patterns and a few of J Welles Wilder scans. Pat of the feature requests is a formula creation and back testing. This will greatly improve the solution, providing functionality more expensive solutions are relied upon.

I recommend MarketNinja readers to download a copy of SWEC to determine if the functionality provided will suit their needs. I am going to continue to use SWEC for charting and supporting Ayamae in their products. I currently have no affiliation with Ayamae.

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Compass Resources, CMR

Compass Resources (CMR) is a favourite company of mine. I've been trading this for a while now and have been in and out a few times. Huntleys newsletters have been talking CMR up a lot lately, and investors are antcipating news of recent drill results and hopefully further confirmation of uranium supplies.

The current chart development is very encouraging forming an ascending triangle.

The citeria set out for a ascending triangle are as follows
The stock should be in an established up trend. 'YES'
At least 2 reaction highs should form the top horizontal line. 'NOT YET'
At least 2 lower reaction lows should form the ascending trendline. 'YES'
Volume usually contracts. 'YES'

As you can see from the checklist above we are waiting for a second test of the ascending trend line. This is an important phase to complete before hopefully confirming an ascending triangle.

Once the horizontal trend line is broken, this line then becomes support.

A good entry point for CMR after confirming the ascending trend line would be a close above the horizontal trend line ($5.74). We would then have a stop loss established as our ascending trendline. Aggressive traders might enter after the second confirmation of the ascending trendline, and this is the re-entry I will be looking at.

Once the breakout has occurred, the price projection is found by measuring the widest distance of the pattern and applying it to the resistance breakout ($5.74-$5.14 = $0.60, target $5.74 + $0.60 = 6.34).

I will follow the progress next week, happy trading.

Disclaimer: No trade setup is 100%, and above is my views of the current setup.

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Important Reading 2007-01-05

Kitco has an important article to read if you hold shares that participate in the copper market. Included is some interesting technical analysis.

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Chart Watch 2007-01-04

Charter Hall (CHC)
This is the first post about CHC (close $2.25)
Count Back Line = $2.17



Easter Star Gas (ESG)
This is the first post about ESG (close $0.32)
Count Back Line = $0.275



Riversdale Min (RIV)
This is the first post about RIV (close $2.20)
Count Back Line = $2.07



Sunland Group (SDG)
This is the first post about SDG (close $3.66)
Count Back Line = $3.53

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Count Back Line

The Count Back Line is a indicator I currently use as a stop loss for my trades. After using the Market Ninja software and finding a stock that fits the Guppy MMA indicator, I plot count back lines to my chart to see if this stock is a candidate to use this as a stop loss. Some stocks that fit the Guppy MMA are still too volatile for this trading strategy and I find that back fitting the count back line indicator to a chart helps produce reliable trades.

I'm trying to find stocks that haven't broken the count back line for at least 2 months. These stocks are in a strong uptrend as defined by the Guppy MMA and are not choppy, causing me to be stopped out.

Below is an example of Riversdale Mining Limited (ASX:RIV).



The indicator at 2006-09-13 shows the last time the stock close below the count back line. This chart demonstrates an excellent trend trading opportunity.

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Guppy MMA

Guppy MMA are extremely important to my trading style. For the past 6 months I have been trading using Daryl Guppy's 'Trend Trading' technique to trade the ASX. Multiple Moving Averages are important in this strategy to determine the trend of a stock.

Gupp MMA consist of 2 groups of EMA's. The first group know as the 'short term' group consist of 3, 5, 8, 10, 12 and 15 day EMA's. The second group consist of 30, 35, 40, 45, 50 and 60 day EMA's.

There are numerous ways to trade this type indicator but I only use to to determine the trend of a stock. I find this the fastest way to determine if a stock is a potential trend trade without requiring me to draw trend lines.

Below is an example of Riversdale Mining Limited (ASX:RIV)



The current aim of the Market Ninja software is to scan the entire market for this type of situation. My current scan looks for any stock with a separation of the 15MA and 30MA of 4% or more with volume greater than 300,000. I'm currently alternating between stocks above 50c and below to try and determine what I find as the best opportunity to trade.

In later posts I will discuss the count back line that I also plot before determining the strength of the trend.

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First Post

Market Ninja is a commentary of the development of my trading software, along with discussions about areas of trading, specifically technical analysis, to help the readers understand the aim of the software along with the techniques of trading I find important.

My strategy is simple and easy to follow, but it isn't mechanical and requires the trader to have a simple understanding of technical analysis. The most useful tool I have is the Market Ninja software I am developing. Although there are many technical analysis solutions available, I developed Market Ninja to suit my trading strategy.

The initial aim of Market Ninja is to download free end of day data, apply an array of indicators to each stock and provide me with a list of stocks that have potential to fit my criteria for a trade. Market Ninja performs this task differently to most scanning software available that I have trialled, which will be discussed in later posts.

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