ASX Momentum Trade Book - Part 2

[peter2]

Trading update: New trade

APX: Bought today's BO-NH at 4.82, iSL 4.40.

Lots to choose from today. Missed A2M and had to choose between ALU and APX.
I'm going to be using more price targets to increase the frequency of trades.

 

[peter2]

Trading update: One trade closed, another starts.

EPD: Sold today at 0.61 as I was concerned by the thinning bid depth. Price did hit our +1.5R level and traded at our +1R level but I gave it a chance to go higher. Not to be and a +0.3R result.

EHL: Bought today at 0.195, iSL at 0.165.
Thought I'd missed this one as price traded above 0.20 and the bid depth was thick. I didn't want to pay 0.205. We got a lucky break as I was watching a big seller took the 0.20 and 0.195. There were 200K at 0.195 available. We bought some quickly.
My only concern is the very high # of shares (2.4Bill), but the trend is strong.

We've got 6K cash, enough for a few cfds trades. I'm feeling bullish.

 

[peter2]

Trading update: New trade

ASL-cfd: Bought at 2.19, iSL at 1.98.
The chart is messed up due to the cap rsg. This is a BO-NH after the capital raising at 2.14. Demand seems to be still there and price is in a strong up trend.


We've maxed out on risk at 6.3%. Now it's important to raise TS's where we can and be ready to defend our portfolio if the market drops. We've found ourselves in a few trades that are not moving up or down (CAJ, SSM, JIN, MAH). I still like all of them and am willing to be patient.

We'll grab short term targets on the ALQ, APX, ASL-cfd if we get the chance. Limit sell orders itm.

 

[kid hustlr]

Pete,

can you confirm your risk limits for bearish/neutral/bullish markets? I now you have written it somewhere but I can't find the exact post

 

[Cam019]

@kid hustlr, here you go.

 

[peter2]

Thanks Cam019.
May I mention, that although the market filter I use is fully bearish the market is not going down. The filter turned bearish due to the rise in volatility. The market looked likely to go down, but hasn't. The selloff in the banks has offset the increase of many other sectors.

The frequency of break-out opportunities has also not decreased. Not typical of a bearish market.

I'm using slightly more risk than normal for a bearish market filter. This is another example of a reasonable (imo) use of discretion in the system.

I've also spread the risk across small/mid cap industrials rather than mostly large caps that are more correlated to the sentiment/movement of the index.

My daily XAO bars will turn blue when the index closes above 5825 but I won't upgrade the market filter until the index closes above 5850.

ps: A reminder: The main reason for monitoring portfolio heat is to find your discomfort level in all market types. I'm also trying to earn a reasonable reward (15 - 25%pa) without experiencing a 10% DD. Parameters that very few equity trend and momentum mechanical systems can provide.

 

[peter2]

At the last annual report there are almost 7,000 shareholders in NWH. Given the difference in subscription price and the last price (40% premium), you'd have to be very financially stretched to not put your money into the SPP. So at $5m maximum and 80% participation you get about $1k each. Obviously actual allocation is up to the Board, but if it's commensurate with the size of your existing holding then it's unlikely to be a terribly meaningful percent.

Obviously there's no point being unhappy about it, given the gains seen in the share price today.

Once more @skc has been shown to be spot on. This portfolio administrator has been allocated $1.2k worth of NWH shares in the retail SPP. I'm not unhappy with the ~70% premium. However this portfolio will not be seeing the $850 gain (+1%). So sad .

 

[peter2]

@Cam019 Nicely done with your short term trade on GXY.
Keep them coming and make sure you keep the losses small.

The three cfd trades I mentioned earlier have concluded with mixed results. This is generally what happens, one goes nicely (CCP) one doesn't (ORI) and one drifts. (CSL). This also shows why I prefer to start a few if they appear at the same time. I treat them as a mini-batch and manage them to get an above average result across all three trades (3T for +1.3R = 0.43/T which is above this threads average of 0.25).

 

[kid hustlr]

Aggressive exits Pete - do you feel the index is turning down again?

great fill on ccp

 

[peter2]

Yes these exits were quick. I knew that I had pushed my risk tolerance a little. I've got lots of open trades at the moment, across plenty of portfolio's.

ORI crashed and burned pretty quickly. CSL was closed before it went XD and probably shouldn't have been started so close to the XD date. We never know about break-outs. This could have gone higher quickly but didn't. CCP was going OK and still has plenty of upside. This exit may have been premature but the profit was acceptable and made this mini batch OK. The CCP price was an average figure from an in the market limit sell order. The cfd provider sometimes fills small orders without going through the real market.

The great thing about short term trading is that I can re-buy CSL immediately or wait for another BO-NH. Last week the healthcare ETF's in the US made new highs. The sector is hot (ABBV, GILD).

I try not to get opinions about what the market may or may not do. The XAO is still stuck in a range while the US markets are at record highs. It's my job to manage the open positions and defend the downside exposure. I'm trying to get involved in case of a rally, but getting out quickly when price falls.

This portfolio finds itself stuck in stocks that are going sideways. That's bad luck and it's my job to manage what happens next. I may close a few trades next week and buy other stocks that look likely to go higher. We'll see. Plans could change tomorrow.

 

[VSntchr]

The cfd provider sometimes fills small orders without going through the real market.

Your not using DMA-cfd Pete?

 

[peter2]

I don't use equity cfds unless I'm fully near fully invested and quite bullish.
I use DMA providers but one of them will fill an order for a 1000 if the market has only 800 available at my price. The other is strictly DMA and that means I have to wait for a market fill or modify my order to get it filled. It's a real pain when 999 get filled and 1 is left hanging.

 

[peter2]

EOW 133 update: ASX Momentum Portfolio +68.9% (103% invested in 8 trades)
Benchmark index: SPAX2F15 (Incl. divs and f credits) +10.0% (past 133 wks)

This weeks sells: EPD (+0.3R)
This weeks buys: APX, EHL, ASL-cfd

Two up and three down days sees the index rise a little. This portfolio lost a little value as it's stuck in trades that are not going higher. I've raised a few exit stops and may even close a few trades to start new ones if there are better looking opportunities. The ones I'll probably close will be those that are currently losing a little.

Outlook: WD DD. Remains bearish as the index stays within this range (copied from last weeks' post).

 

[kid hustlr]

Pete,

I noticed you raised the stop on SSM - for me theres no technical reason to do so - this is just purely due to it not going anywhere? Do you find you do this often?

My thinking is I'd rather just exit than leave the stop in 'no man's land' - interested to hear your thinking

 

[peter2]

SSM: Has gone XD (0.03) so I don't need to give it a little more room. I'd be concerned by a close <1.45 and <1.40 I'd be out. The large sell order at 1.50 has reappeared after the XD date. I'm sitting on a good profit on this one and don't want to lose too much of it. At the same time I want to own it when price goes >1.50.

I agree that 1.40 is a bad spot for a exit stop as it's neither tight nor loose. You've probably talked me into using 1.45.

This is one problem when trading a stock in two time frames (weekly and daily) in different portfolios.

 

[kid hustlr]

Well you confused the heck out of me by replying in the other thread.

Yes fair point re profit protection, I see in the other portfolio you've been in for a long time.

1.45 looks technically better.

The large sell order at 1.50 got hit and it was 1.51 bid for a while (i literally checked it the other day and saw the price action) - it worries me that it didn't go through with it and its now back in the range. A red flag for me

 

[peter2]

EOW 134 update: ASX Momentum Portfolio +67.3% (44% invested in 4 trades)
Benchmark index: SPAX2F15 (Incl. divs and f credits) +9.7% (past 134 wks)

This weeks sells: SSM (-0.1R), ALQ-2 (-0.1R), JIN (-0.5R), ASL-cfd (-0.4R)
This weeks buys: nil

The index closes once more in it's range and our portfolio loses a little again. I'm noticing fewer opportunities and more quick reversals (like ALQ). As the index closed lower this week I've decided to reduce the portfolio heat, purge the losers and be in position to revitalise the portfolio when new opportunities appear.

SSM: After discussion on the forum and in my head I decided to sell half of my personal position. It's only fair that I close the short term trade and keep the weekly trade open. I've also placed buy orders if 1.50 is traded again.
ASL-cfd: Trade closed as price drifts lower. I've also placed buy orders if 2.20 trades.
ALQ-2: Trade closed as price closed near our entry price.
JIN: Trade closed as price closed near our exit trigger on low volume.

Portfolio heat is now only 2.3%. The losers are gone and we hold only winners.

Outlook: WD DD. Remains bearish as the index stays within this range (copied from last weeks' post). There's no point speculating what's going to happen next. We're ready for anything.

 

[peter2]

Trading update: New trade

MND: Noticed yesterday's BO-NH. Bid 15.40, iSL 14.70. Bought at open for slightly less, same size iSL.
Strong weekly trend and good recent reports. Price hasn't fallen as much as market showing some relative strength.

MND: Also bought for weekly portfolios with a wider iSL.

edit: Please don't ask me why I haven't bought A2M in 2017.

 

[peter2]

Trading update: Trade closed.

APX: Sold at T1 (5.28) using limit sell. I placed this sell order a few days ago when reducing the portfolio heat. Result +1R ($872). The weekly chart looks over extended and due for a pull-back, but the APX trend is one of the strongest atm.

I've been looking for other opportunities but they seem to be mostly in mineral explorers that I have avoided. I have also been avoiding stocks with low daily traded volume just in case the market falls quickly. One example of this type of stock is SM1. The price consolidation under 4.50 looked very attractive but the past data is a bit spotty. The volume has picked up as the price has gone higher.

 

[peter2]

I should add that I don't take +1R profits on trades with potential for a lot more. For example our trade in MAH has started to move and we could have grabbed another +1R (0.21) today. MAH is a lower priced stock and the price can potentially move to the post restructure highs near 0.35 (+8R). If price moves quickly to 0.25 and the sellers look likely to slap it lower I may sell then. The trade management is fluid and depends on what the price does.