Chart Watch 2009-02-17

XAO - All Ordinaries



The All Ordinaries closed at 3,412.200 today, a 49.1 fall or 1.42%. The day started sideways, with a sell off after lunch. Last weeks test of the 50MA failed (3500 level), and indicators showing signs of short term oversold levels. The US markets were closed yesterday.

IRN - INDOPHIL



I added IRN to my watch list today. Breaking 50MA on above average volume (up $0.02 or 7.14%). The stock has a few levels of above resistance. On the watch list for now to see how this one plays out.

ASX



ASX hit resistance with a thud today.

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Chinese Recovery

After a fall from 6000 down to 1800, the Shanghai Composite Index has fallen a long was since August 2008.

Colin Twiggs has chart showing the downward channel on the weekly chart has been broken, and the down-trend is weakening.

XAO Index

Our index as demonstrated below, is yet to break out this downtrend.

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BHP Inner Strength

Great read for people interested in BHP. BHP is one of my favorites for my long term portfolio.

"As a result of the board’s decision, BHP is going to emerge from this episode in the commodity cycle in a position even stronger than the one in which it went into the bullmarket in commodities."

"BHP, with minimal debt and strong cash flows, will be able to absorb whatever pain the downturn generates"

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OZ Minerals Update

Yesterday Oz Minerals sent a six page statement to the ASX detailing hundreds of millions of dollars of changes and cuts.

OZ Minerals says not only has it deferred a number of development projects and has entered negotiations to refinance debt.

Martabe gold project in Indonesia : suspended
Sepon Copper Project in Laos : deferred work until after 2009
Dugald River zinc project in Queensland : not commence until 2009
Izok Lake and High Lake project in Canada : deferred feasibility studies


Source

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RIO Offer no longer in the best interest of shareholders

The bids off for RIO, according to the latest release by BHP. Citing worsening market conditions and divesting demands from the European regulators, the $US66 billion ($A104 billion) bid has been pulled sending RIO price down 37% in early London trade.

Marius Kloppers, BHP Billiton’s CEO, said:

“We have previously said that similar cultures and the overlap of key assets and
infrastructure make this a compelling combination. Recent global events and associated falls in commodity prices have, however, altered risk dimensions. BHP Billiton is very focused on balance sheet strength. Accordingly, the greater debt exposure of the combination plus the difficulty of divesting assets have increased the risks to shareholder value to an unacceptable level.“

In a statement release the same day, BHP has also approved a $US4.8 billion ($A7.35 billion) investment to expand its iron ore operations in the Pilbara by 32 per cent to 205 million tonnes per annum. With substantial uncertainty in the short term outlook of iron Ore, this is confidence boost to the long term view held by BHP.

Speculation has commenced on many forums relating to the direction BHP will take from here. Included are; Wait for RIO to continue to fall and initiate a new offer at a cheaper price, purchase other mid-tier producers or near term producers, Make a play for oil producer WPL and/or make a play for iron ore producer FMG.

More likely short term initiatives may include share buy back, or a new direction to sit on cash until the financial turmoil eases.

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Chart Watch 2008-06-12

XJO - ASX 200



BHP - BHP



AMP - AMP



Respecting the 100MA and looks to be forming a triangle, looking for a break lower.

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Chart Watch 2008-06-03

XJO - S&P ASX 200



XJo showing signs of weekness again with the current trend line being broken. Looking at 100MA for support now.

XJO - S&P ASX Financials



XFJ was a great short on the 22nd of May. 100 MA resisted the uptrend and also broke the current uptrend.

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Chart Watch 2008-05-25

XJO - S&P ASX 200
XJO sitting right on its current trend line.



CMR - Compass Resources
Second pullback for CMR after breaking out. Optimal entry would have been the first pullback after breaking the 100MA.



AGO - Atlass Iron
After a sharp stron volume rally, prices have pull back on weaker volume. Looks to be forming a bullish pennant.

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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.

Sponsored By: Agloco - Own the Internet Get paid to surf the web!

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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?

Sponsored By: Agloco - Own the Internet Get paid to surf the web!

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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.

Sponsored By: Agloco - Own the Internet Get paid to surf the web!

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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.

Sponsored By: Agloco - Own the Internet Get paid to surf the web!

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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.

Sponsored By: Agloco - Own the Internet Get paid to surf the web!

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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%.

Sponsored By: Agloco - Own the Internet Get paid to surf the web!

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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




Sponsored By: Agloco - Own the Internet Get paid to surf the web!

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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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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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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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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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