The local market looks to have stalled at current resistance levels after a decent rise from the lows. Uncertainty on global growth prospects, a slowing China and trade uncertainty all weigh on future gains.
The price of gold has also stalled at a previous resistance zone on the weekly chart and moved down out of a small consolidation pattern on the daily chart shown below.
Some analysts reckon the price of nickel could rise as stockpiles dwindle. Western Areas could benefit and has shown previously that the share price can go for a decent run as the weekly chart shows.
The daily chart of Western Areas shows a break out of the recent down trend and some possible trading opportunities.
Jack Bogle the father of index funds passed away recently and one of his most memorable quotes was “Don’t look for the needle in the haystack, buy the haystack.”
With low cost index funds beating most fund managers over time it can be a very efficient way to invest for the long term. Charlie likes to trade stocks, indicies and commodities as well as having funds in longer term investments.
One thing to remember is not to put all your eggs in the one basket and spread your risks. It was interesting to see one well known fund managers “concentrated” equity fund fall close to 25 per cent last year and no doubt when things go astray if you have a lot of equity in one stock you bear the brunt of any sudden falls.
One old trading adage goes like this “If a stock is rising you buy, if it’s falling sell and don’t’ bet the farm.” Sounds relatively straight forward though in practice it can be very hard to admit your analysis is wrong and get out with a small loss, it can be a mental challenge for sure and just how a trader measures what is going up and what is going down could fill a thousand pages.
One stock that has had a recent downgrade is Costa Group whose shares then fell 30 per cent.
On the other side of the coin companies that post better than expected results can move up quickly with Kogan shares rising sharply right after reporting decent results.
One thing for sure is that you never know what is going to happen next so keeping risks small can be a prudent way to go.
We bought Aristocrat Leisure for the “Educational” portfolio after price moved out of the down trend and moved up out of a small continuation pattern.
The long term chart of Syrah shows a tendency for some good prices trends in both directions.
Globally diversified Macquarie Bank recently bounced off the long term trend line and has been performing better than the local banks and could keep doing that depending on what the Hayne report recommends and continuing global growth.
Disclaimer: The commentary and trading positions taken are for educational purposes only and are not an invitation to trade. Trading is risky and individuals should seek Professional counsel before making any financial decisions. Many thanks to Incredible Charts.com software for most of the charts used in the column.
Monitor, measure, manage and maximise… Cheers Charlie.