Back in Business

Well I'm back here in Queensland after 4645km trip across the country. No problems or dramas except a few water crossings as previously mentioned.

Ready to get back to business! At this stage only 1 trade has gone awry whilst away (I had pared back most of my positions before leaving, given we had almost no internet reception for most of the trip).

I'll have end of week analysis posted by Friday night or Saturday morning and a trading update thereafter, including my first month's performance.

It's also the start of the earnings season with a few favourites (COH e.g) having already reported, as has CBA which has implications for future trades. I'll be under the hammer working in my investment company doing new valuations on approx. 80 companies (and the ASX50), so it will be a busy few weeks, amongst unpacking and getting a handle on our new environs!

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Followup to ASX100 watchlist

On Monday, 10th of January I posted about some ASX100 stocks that came up on my radar as possible trades.

With a full week of trading over, let's see how they went (italics is original Monday suggestion)

• Caltex (CTX) Possible reversal on oil price. down 76c or 5.1% - due to flooding impact on profit, not my analysis!
• Coca Cola Amatil (CCL) Possible too quick.... indicating a probable retracement - 4 straight days of sideways action. KC Signal** worked here...
• Cochlear (COH) Medium term support at $76 to re-enter trend  - rebounded off medium support for new short term uptrend, up 4.6%
• Computershare (CPU) Sideways bullish at the moment. Watch for breakouts - broke out of trading range for 3.7% return
• CSL - Good possibility here for a quick short - no support opportunity, but remains Sideways Bearish, but support at $36
• CSR - Long candles indicate lots of intra-day opportunities -closed at same level as Monday, with many intra-day trades in between. Sideways Bullish continues.
• David Jones (DJS) Possible short and medium term trend could develop here. Support at $4.40.  Up 2.6% on new uptrend, although resistance met (long shadows on recent daily candles) at $4.75-$4.78.
• Harvey Norman (HVN) No sign of imminent upside breakout. Well I got that wrong - 4.8% uptrend, probably due to new upcoming sales of white goods for flood replacements.
• Incitec Pivot (IPL) all medium term indicators suggest continued strength. A small retracement on Tuesday, but ended up for the week. Still good trend.
• JB Hi-Fi (JBH) Could be a good upside move - wait for confirmation - confirmation on Tuesday, great new move 5.1% for the week and probably rising.
• Leighton (LEI) new short term uptrend in place with reversal of price action - correct, but somewhat weak with not very impressive volume force
• Macarthur Coal (MCC) showing signs of a strong breakout - trend continued, but still barely closed above Monday close - as I said, better opportunities were available.
• Mirvac Group (MGR) One to watch for continued signs of strength - new short term uptrend, 3.1% return. Likely to continue, but sideways for awhile.
• Myer (MYR) similar action to JBH and DJS. Limited upside - only closed 4c (or 1.5%) up on Monday. Weak trend at the moment. 
• Paladin (PDN) possible upside move in the coming days or next week - breakout on the Wednesday, closed 7.5% up for the week.
• Primary Healthcare (PRY) not sustainable in the short term, possible entry on retracement for the hardened souls - correct, price went nowhere all week.
• Qantas (QAN) signals a reversal for the flying kangaroo. Need further confirmation to enter a trade - no further confirmation - long shadows indicate confused market.
• Telstra (TLS) Low volatility means selling options or spreads is not very profitable. But it also means cheap directional plays - small uptrend from a breakout. The Jan 2.70 in-the-money (ITM) Call Option (TLSD68) could have been bought for 9.5c on Monday, and traded at 17c today. Classic ABC Trade**. 
• WorleyParsons (WOR) small uptrend underway, closing above local resistance at $27.50 - correct: 2.4% small uptrend for the week.

Results
Out of 19 forecasts, I'll ignore CTX as being "correct" (I thought on oil price - which went up, not the flood damage to refineries), I'll separate the results as such:

• Correct call - 8 (CPU, CSR, DJS, IPL, LEI, MYR, PRY, WOR)
• Wrong call - 1 (HVN)
• Possible call, confirmed - 7 (CCL, COH, JBH, MCC, MGR, PDN, TLS)
• Possible call, not confirmed - 2 (CSL, QAN)

Not bad for an afternoon's analysis. 


Remember, its not the win/loss ratio (i.e how many you get right or wrong), but the profit/loss ratio. You can have 9 losers and 1 winner and come out by a mile, with proper capital and risk management.


Sidenote 1- a KC Signal is something I've discovered that measures a "too-fast" daily price move. Analysis of daily candlesticks thereafter will confirm or ignore the signal's intent.


Sidenote 2 - an ABC Trade stands for "Asymmetric, Black Swan, Contrarian". Effectively, going against the grain - or the unexpected - for an excellent payoff (e.g 200%) but probably very low or zero chance of success.

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