Short Term Trading Weekend Lounge: 5-7 Oct, page-34

"As far as sectors are concerned, I’m looking at contrarian positions. The strongest sectors are Materials and Energy. They both looked primed for a move to the downside."

Contrarian positions at the right time are the best for sure, I see a few newbs talking about oil juniors lately, and if they haven't moved already last 12-18 months, they are usually dogs imo. (too late) time to invest was at $30 when many of us backed the rebound. Investing at above $70 US once this has been realised is late comers folly imo. Market chasers. 

Look at our discussion here couple years ago with ECG - East Coast Gas @mouse

and now look at a few suggestions then,, COI, GLL, and COE - 5-15 baggers

Personally, I am really getting the feeling junior Gold is about to turn 2019, and will be a great place to focus your $ next 12-18 months.

AUD + unloved sector = outperformance.

A bunch is leveraged producers on lows (RSG etc low $1) + a few explorers like imo CHN (15c), OKU (26c) etc thrown into mix, and even a few old totally hated dogs like FML and WCN etc for good measure

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The bearish rising wedge broke downwards on Monday and continued on Tuesday. Wednesday-Friday saw a counter-trend move. The Index remains below the “cloud” which is bearish territory. The long-term Stochastic (50.10.10) remains bearish.

The chart remains above the 200-Day EMA, which is a positive.

Until we get some bullish signals, it’s best to remain cautious. Wait.

XJO Weekly:



XJO had a small fall this week -0.35%. The long-term trend remains up.

Indicators are on “sell” signals. Wait.

XJO Monthly:



XJO is into the first week of October. It is too early to make any definitive conclusions on the basis of this chart.

Both the long-term Stochastic (50.10.10) and the short-term Stochastic (14.3.3) are in the don-not-buy zone above 80.

INTERNALS – AUSTRALIAN MARKET.

XJO was down a little this week and internals are weakening. The number of stocks in the ASX100 that are above their 200-Day MA fell from 57% the previous week to 53% this week. That’s getting close to a bearish condition

Percent of ASX100 Stocks positive on the Directional Movement Index fell from 51.5% to 39.4%. That’s a bearish reading. The % of ASX Stocks above their 50-Day EMA fell from 41.4% to 35.4%. That remains bearish for stocks.



We can see from this chart that the market is down to a zone where bounces have occurred in the past. Indicators can go lower, however, as we saw in February, 2018. If we see the shorter term indicators (% of stocks +ve on DMX and % of stocks above 50-DEMA) get down below 20 – then bounce – we’ll have a buy signal.

Four out of 11 Sectors were up this week, but the most important sector (XXJ) was down -1.43%. XXJ includes the four big banks. The best two sectors were the export-oriented resource sectors, XMJ +1.9% and Energy +1.96%. The worst two sectors were XDJ -2.21% and XPJ -1.84%. Both of those sectors are focussed on the domestic economy.

Copper Futures:



Copper is in a sideways consolidation above the old double bottom. Such action usually implies a break to the upside. The short-term Stochastic (14.3.3) has broken below the long-term Stochastic (50.10.10) – that’s a bearish signal. Wait.

SECTOR CHARTS

XMJ:



XMJ has been in a strong bullish rally. Short-term Stochastic (14.3.3) is at 97.26 in the “Do Not Buy” zone above 80. Long-term Stochastic continues to rise. Wait for a pull-back and then bounce to look for buying opportunities.

The four strongest stocks are S32, NST, AWC and IPL.

XEJ:



XEJ is in a similar case to XMJ. It has had a strong bullish rally Short-term Stochastic (14.3.3) is in the “Do Not Buy” Zone. The long-term Stochastic (50.10.10) is also in the “Do Not Buy” Zone. A break by the short-term stochastic below the long-term Stochastic could be a sell signal.

The strongest stocks are Santos, Woodside and Whitehaven Coal.

XIJ:



XIJ has had trouble breaking above horizontal resistance. Stochastics and Dynamic Zone RSI are on sell signals. Wait and see how this plays out.

XXJ:



This is a very bearish chart. As a general principle leave the Financials alone.

XXJ has nineteen stocks in the large-cap ASX100. Only three of those are out-performing the XJO: QBE, MFG and MQG. QBE and MFG are by far the best performers.

XUJ:



XUJ (Utilities) has rallied nicely since its low in mid-September. It remains below the “cloud” so this could be a counter-trend rally. Be cautious about buying anything in this sector.

The two strongest stocks are APA and Ausnet.

XDJ



XDJ has been in a pull-back since the end of August. It now is finding support at the 200-Day EMA. If it has a significant bounce here it could be OK. Indicators are at a level suggesting a contrarian position could be worth thinking about. Watch.

XHJ:



XHJ has been in pull-back mode since early-September. It had over-shot the Standard Error Channel, and, as often happens in these cases, the ensuing correction over-shot on the downside.

Indicators are now suggesting that taking a contrarian position might work out well. Watch.

Strongest stocks are RMD and RHC.

XNJ:



Like some other sectors XNJ has been in pull-back mode since the end of August. Both Stochastics are now in the Buy zone. Watch for a break to the upside in those indicators for a contrarian play.

Strongest stocks are Brambles and CIMIC.

XSJ.


XSJ has been in a pull-back since mid-August. It is now consolidating at horizontal support.
Theory suggests this should break lower.

Indicators are now giving short-term buy signals so we could get a counter-trend rally if the index bounces here. Wesfarmers received a favourable court finding on Friday clearing another hurdle in its efforts to spin off Coles as a separate entity. That could be a catalyst for upside movement in the index.

XTJ:



In August, XTJ had a spectacular rise which broke the bear market which had held it since early-2015.
Since August, XTJ has been consolidating in bullish territory above the 200-Day EMA and the “cloud”.
Indicators are on short-term buy signals.

XTJ consists of only two large-cap stocks, Telstra and TPG. TPG is preferred, but Telstra is worth a look.

XPJ:



XPJ has been in pull-back mode since mid-September when to failed at horizontal resistance.
It has now come back to dual support: horizontal and the 200-Day EMA.

Friday’s candle was a “hanging-man” which often comes at the end of a trend. Coming at dual support adds more significance.

We could see a bounce here. If we get that, it should provide at least a short-term bullish trade.

Strongest stocks are IOF, CQR and GMG. IOF is under the influence of a take-over offer – leave that to the professionals."As far as sectors are concerned, I’m looking at contrarian positions. The strongest sectors are Materials and Energy. They both looked primed for a move to the downside."

Contrarian positions at the right time are the best for sure, I see a few newbs talking about oil juniors lately, and if they haven't moved already last 12-18 months, they are usually dogs imo. (too late) time to invest was at $30 when many of us backed the rebound. Investing at above $70 US once this has been realised is late comers folly imo. Market chasers. 

Look at our discussion here couple years ago with ECG - East Coast Gas @mouse

and now look at a few suggestions then,, COI, GLL, and COE - 5-15 baggers

Personally, I am really getting the feeling junior Gold is about to turn 2019, and will be a great place to focus your $ next 12-18 months.

AUD + unloved sector = outperformance.

A bunch of leveraged producers on lows (RSG etc low $1) + a few explorers like imo CHN (15c), OKU (26c) etc thrown into mix, and even a few old totally hated dogs like FML and WCN etc for good measure

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