Great concept and analysis Captain on the XSO today.
My only critique is that work of that quality should be on the XMD, not that other chat site!!
I did have a scan of those gold stock charts you requested the other day, but I wasn’t able to reach easy conclusions without doing a fair bit of work. I’ve had a look since and make the following comments. To save time I haven’t posted charts but can selectively if you want to review something further.
NST:
The recent peak a $3.26 looks most likely the top of Wave 5, i.e. the end of the 5 year bull phase. We’re now in a strong pullback, so I wouldn’t want to be long this stock right now. If you want to play your Van Eck theory, which presumably you do, there’s reasonable support at $2.20 where it could bounce. It’s falling sharply with momentum so one more week could be enough to reach there and then if we get a reversal bar that would be the time to set your long trade. So for me I’d hold off a little if you can before you open the trade. But then get out after the rebalance. I’ll mark up a chart if you want further clarification of this view.
I’m not sure what instruments you’re using, I assume options. NST has fallen 25% in 6 weeks, so you might be paying a lot for volatility. So a bit tricky to set this one up.
RRL:
I remember looking at RRL at $1.15 right on its lows for a long trade. It had that massive fall in March 2015 which brought it to my attention. It then stabilised over 17 weeks. I can’t remember what was going on when the low occurred and it turned, but I recall knowing exactly what was happening at the time and that I could double my money to $2 something. Unfortunately it didn’t wait for me whilst I was tied up in other positions. That story’s instructive though in that I think a lot of people built positions in that basing phase and then ready to exit in the low $2’s. I had marked $2.20 on my chart as the key resistance point and it ran up to that level almost exactly.
The stock then needed to work sideways as those investors from the low took their profits and has spent 5 weeks moving between support at $1.88 and resistence at $2.20. So chart makes good sense to me to this point. This weeks bars is a worry. It dropped sharply through a confirmed uptrend line and then recovered today to close right on it. The low this week was just short of the 38.2% retrace.
This is a bit of an inflexion point and could break either way. I don’t trade this type of position but wait for the next weeks bar to see if green or red to confirm direction. For your strategy though, the stock has been in a bull phase, and we’ve just had a 5 week reaction to that. I suspect it will break up but then that only confirms if it breaks this weeks high of $2.09. You then have just above that the strong resistence level of $2.20. It will need a lot of energy to break higher, but your Van Eck buying might give it the push. I’d be a reluctant buyer as at today and would want to wait another week. That big spike today could have contained a bit of short covering and so might fall back first before it tries to push higher. I’d wait a week and see if a long trade gets confirmed. I’ll put up a chart to explain further if needed.
EVN:
I haven’t done much work on the chart, but I don’t like this stock. Far too volatile, full of traders. It’s had a bit of media attention in recent months so probably full of retail traders which is what the chart looks like. They tend to know fib levels well and a few basics so you’d probably expect to hit lots of support/resistence and standard fib/gann levels on this chart. It’s touching a horizontal support level now and is also at the 75% retrace of the last run up, so that’s probably a turning point for something like this but I really don’t have much of a view as to whether this will actually turn here.
That last spike went up and touched the very strong 50% All time high level at $1.62 and reversed. If it reverses again (up) it will probably consolidate in the range $1.24 which is 38.2% ATH and the $1.62 level for a while before having another go a breaking through that 50% level. But that's if it turns in the next week or two.
Generally, I don’t like Jake Klein who runs this. I understand he was Nick Curtis’s understudy at Macquarie Bank and followed him to the board of Lynas where they spruiked that company to the moon and then almost to oblivion. He’s now done a roll up of a few gold companies into EVN as I understand it, but I saw him interviewed and he just talked about external factors such as gold price and AUD as positively affecting his business and nothing about internal or operational issues or how they would sustain themselves through a cycle, typical of a spiv banker. I just wouldn’t invest in a company he is running, maybe short it at the appropriate time.
BDR:
This one I like for a long trade. Down trend line has broken. Elliot Wave looks complete. Has had a little run and pullback. Only expect it to build slowly from here, or go sideways to build a base but it looks ready to start moving up. Minimum confirmation would be a green bar next week. Not interesting or strong enough for me to trade it long, but I certainly wouldn’t short it based solely on the chart. Those three weekly bars from 14th August where the price spiked up 78%, was probably the shorters exiting, which you often see at the end of long downtrends. It then falls back in subsequent vacuum, and then it can start to build a proper foundation. Similar to what happened to STO chart in October. Sorry that’s not what you want to hear for your strategy. No reason Van Eck can’t force another dip but that’s not going to get much follow through.
AQG
Not much opinion. It’s sitting on the bottom rail of a wedge shaped channel that has a 30% price width, so could trade within that. Otherwise not doing much. Just overall trending slightly up and building a base. No strong views on it.
Summary:
The charts to me aren’t as supportive of your strategy as you might like. For NST and RRL try to give it another week to improve the odds of a long position. BDR is not a short.
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