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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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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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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