South 32 goes North
11.31 am There's been a very modest start to the day after a decisive three day move down killed any momentum. The XJO is 0.2% higher and overseas markets were flat to a touch higher.
I didn't write about it on the close but I decided to take a long in BHP spin off S32 towards the end of yesterday's trade as a proxy for BHP since I thought there could be more leverage. There was an interesting set up where the stock had fallen hard after a disappointing result then had one leg of a recovery before a slow overlapping 5 wave correction of that bounce which formed a higher low and started to roll up yesterday. So I went long at 319 and have sold half at 330 though I'd buy back on an intraday pullback as I think there's more in it. It looks like a correction playing out and I'd guess it's the 3rd of 3 waves in the correction but the potential upside could be in the mid 340s and possibly as high as 360 where there's serious resistance.
I was worried about large cap longs in NXT and SYD but they're doing enough for me to stay in them. Actually, Sydney Airport looks to be resuming the rally as I'd hoped so the scenario of a move back above Monday's high is still in play.
The US gold price fell about 0.7% but the AUD dropped closer to 1% so the net effect should have been good for our gold sector in a trivial way. However, we normally respond to the headline gold price so the local sector is a touch softer today with Resolute one of the worst performers, down 2.5 to 119.5. Friday often sees an unwind of the week's performance in the golds as the stocks attract a lot of short term traders and RSG has done relatively well this week. I'm happy that the stock is looking very good in the medium term so I'll sit with the position.
In the small caps, I sold the balance of the TAW at 49.5 on the open and also a similar lithium momentum play in Altura at 44.5 (entry 43) as they looked peaky. They've both dropped since. Otherwise, CLQ has drifted back to 125 where I've added to the position and I've also bought some RWC at 438. I could have bought these on the close as they're holding a long uptrend and have been slowly gathering steam over the last week or so since testing the lows. Anyway, it's starting to accelerate so better late than never.
AC8 and BUB are little changed and MSB is up 2.5, partly compensating for the slip in CLQ. All up, I'm slightly ahead in this portfolio for the moment.
12.06 pm We're definitely in the doldrums with the index only up 7 with the Wesfarmers demerger proposal accounting for a 9 point rise in the ASX 200.
12.44 pm Out of the last of the S32 at 336. Would like to be long this still but didn't have a full position, the strength this morning surprised me. Hopefully it can drop back to 328-330, maybe on Monday or Tuesday. I'm also slightly wary of going too hard because the company is said to be still in the running for the Rio coal assets and a bad outcome could reverse things sharply.
Nextdc limited is looking good now, up 15 to 696. I have a quarter of my position on the offer at 698 as it could fail here but I think it's more likely to kick higher.
1.47 pm The index has swung higher to be up 23 points so it's not just Wesfarmers keeping the market in the black. I sold the extra CLQ from this morning at last night's close of 129. It looks better and better but with the share purchase plan set at 115 I feel as if there will be regular dips to add stock on.
2.47 pm Out of a quarter of the NXT at 698 while the market has strengthened to be up 30.
I was impatient with an AWC long which I cut yesterday. There is a much better signal today and I bought back earlier at 231. The minor 3 wave retracement seems complete and the stock is pushing up strongly. It's currently trading at 234.
3.35 pm Origin Energy is giving roughly the same buy signal as S32 yesterday where there's a bounce back from the early February sell off which corrects in a wave that's split into a standard Elliott 5 wave structure. Where it differs from S32 is that there's a tight little buy signal after that, triggered today. I don't really have room to take this and my other positions are going well but I may get a chance on Monday.
4.31 pm The index rallied 0.5% today and finished more constructively than I expected with no significant late sell down. Although I'm not really bullish at present, I'm comfortable with my long positions as it seems that the pressure on financials is not going to lift quickly and that can allow other sectors to run even with a fairly flat overall market.
My large cap positions came good today and even RSG caught a late bid to close square on the day at 122. The small caps eked out a minor gain to complete a good week in that book.
I'm interested to see if ORG runs on Monday and if I can get on board if it does. Santos may be a viable alternative as it may have made a higher low though it didn't really go today. Origin is clearer but there are some similarities.
I didn't write about it on the close but I decided to take a long in BHP spin off S32 towards the end of yesterday's trade as a proxy for BHP since I thought there could be more leverage. There was an interesting set up where the stock had fallen hard after a disappointing result then had one leg of a recovery before a slow overlapping 5 wave correction of that bounce which formed a higher low and started to roll up yesterday. So I went long at 319 and have sold half at 330 though I'd buy back on an intraday pullback as I think there's more in it. It looks like a correction playing out and I'd guess it's the 3rd of 3 waves in the correction but the potential upside could be in the mid 340s and possibly as high as 360 where there's serious resistance.
In the small caps, I sold the balance of the TAW at 49.5 on the open and also a similar lithium momentum play in Altura at 44.5 (entry 43) as they looked peaky. They've both dropped since. Otherwise, CLQ has drifted back to 125 where I've added to the position and I've also bought some RWC at 438. I could have bought these on the close as they're holding a long uptrend and have been slowly gathering steam over the last week or so since testing the lows. Anyway, it's starting to accelerate so better late than never.
12.06 pm We're definitely in the doldrums with the index only up 7 with the Wesfarmers demerger proposal accounting for a 9 point rise in the ASX 200.
12.44 pm Out of the last of the S32 at 336. Would like to be long this still but didn't have a full position, the strength this morning surprised me. Hopefully it can drop back to 328-330, maybe on Monday or Tuesday. I'm also slightly wary of going too hard because the company is said to be still in the running for the Rio coal assets and a bad outcome could reverse things sharply.
Nextdc limited is looking good now, up 15 to 696. I have a quarter of my position on the offer at 698 as it could fail here but I think it's more likely to kick higher.
1.47 pm The index has swung higher to be up 23 points so it's not just Wesfarmers keeping the market in the black. I sold the extra CLQ from this morning at last night's close of 129. It looks better and better but with the share purchase plan set at 115 I feel as if there will be regular dips to add stock on.
2.47 pm Out of a quarter of the NXT at 698 while the market has strengthened to be up 30.
I was impatient with an AWC long which I cut yesterday. There is a much better signal today and I bought back earlier at 231. The minor 3 wave retracement seems complete and the stock is pushing up strongly. It's currently trading at 234.
4.31 pm The index rallied 0.5% today and finished more constructively than I expected with no significant late sell down. Although I'm not really bullish at present, I'm comfortable with my long positions as it seems that the pressure on financials is not going to lift quickly and that can allow other sectors to run even with a fairly flat overall market.
My large cap positions came good today and even RSG caught a late bid to close square on the day at 122. The small caps eked out a minor gain to complete a good week in that book.
I'm interested to see if ORG runs on Monday and if I can get on board if it does. Santos may be a viable alternative as it may have made a higher low though it didn't really go today. Origin is clearer but there are some similarities.
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