ERG has flatlined...some TA studies

[tech/a]

Re: ERG has flatlined...

Thats it dutch I have some old examples home and ill post them later.

They show the idea over a length of time this however is not hindsite but on going live analysis.

 

[RichKid]

Re: ERG has flatlined...

Looks like ERG is cooperating with your analysis Tech, heading in the right direction. Was even on the Comsec sells list for awhile this morning (always a good sign, looks like comsec traders sell stocks while they are going up- d'oh!).

 

[dutchie]

Re: ERG has flatlined...

Not this one RichKid
I'm in for the long haul - hopefully

 

[RichKid]

Re: ERG has flatlined...

ERG intraday for Friday.

 

[stockGURU]

Re: ERG has flatlined...

Bad news for ERG today:

IBM / ERG Tender Update

In accordance with Listing Rule obligations, we wish to advise as follows.
The Transport Ticketing Authority (TTA), part of the Department of Infrastructure in Victoria, has advised that it will not be continuing further negotiations with the consortium to which ERG is a subcontractor in the lead up to selecting a preferred tenderer for its new public transport ticketing system. ERG will consider alternative options ahead of a final decision.

ERG down 20% to 34 cents, unfortunately closing below 35 cents which had been where ERG seemed to be finding some good support early last week.

Not looking good in the short term. Any comments?

 

[el_ninj0]

Re: ERG has flatlined...

Ouch for short term. Prediction (which is based on nothing but instinct) is that it will go down even more tommorow, sit at between 20-25 cents for about 1 month.

Remember, thats pure speculation, and could very well be wrong.

 

[ghotib]

Re: ERG has flatlined...

You there Tech? RichKid? I'm very curious to know what the chart suggests to you guys after today?

IMO, on the fundamentals there's no reason for the price to be going anywhere except sideways around 30 - 33 cents. This weeks flurry seems to have blown up from speculation that the company might win a new contract sometime this year that might generate revenues some time this decade. Wow!

But does the chart at today's close -- just noticed the time, I mean yesterday's close -- give any signal that trading might be more interesting than that?

Thanks

Ghoti

 

[tech/a]

Re: ERG has flatlined...

G

If its any help I seem to concure from a technical veiw.

 

[ghotib]

Re: ERG has flatlined...

Thanks Tech.

Ignoring the rumours and facts for a moment, how would you have used this chart for trading over the last couple of weeks? I mean things like - if you bought very early in the measured move you posted, where would you have set stop loss(es) and why? Would you every buy on a movement as short term as this one?

Rich?

Ghoti (my brain is full)

 

[tech/a]

Re: ERG has flatlined...

Id have been caught like everyone else.
Just like BAS.
Even trading short term whether technical or fundamental your going to get belted with gaps down like the 2 mentioned.

Im convinced this is a strong reason why 95% of traders fail as their universe of stocks consist of these sorts of volotile stocks. no matter how close your stop is gaps like these just take them out.

In the breakout thread I think Ill expand the trading ideas and results with a few different ways of trading them.
Im also thinking of running parallel breakouts on stocks $1-5 a portfolio of 10 and $5 + another portfolio of 10.
Trade all the same and see whether my theory of universe selection being a major reason for failure.

 

[RichKid]

Re: ERG has flatlined...

I got stopped out on this but the gap didn't affect me in the sense that the planned loss was what I took due to entry near support. I'm still not convinced it's over for ERG but I'm staying out as it's got a different risk profile now. The next two days are critical imo. My interpretation is that prices broke through after the profit annct as it signalled the start of a turnaround. The contract is what I believe pushed it further than 40c as people anticipated a major rerating if the contract was won.

The buy depth is still there but it has to close above 35c, if not I see it falling as TechA shows in the chart. People would think again that the co is where it was before the profit annct ie no strong sign of recovery yet. Hence a major contract win may spur another go at 35+.

BTW, Tech those big blue bars- are they meausures or actual highs? My data suggest prices didn't go that high. I agree wholeheartedly with Tech's comments about the stops and very volatile stocks, only takes on or two in quick succession to stuff up the figures. That's one reason I have predetermined profit take levels for very volatile stocks, it may run further but I prefer to book a reasonable profit, the trick is picking the risk profile and figuring out what drove the price, which is tough.

The good thing about tight stops is you can buy in again if things look much better, you only take a small loss and there's no stress.

 

[tech/a]

Re: ERG has flatlined...

BTW, Tech those big blue bars- are they measures or actual highs?

Length of the moves they cover the actual bars.

 

[The Barbarian Investor]

Re: ERG has flatlined...

Comsec is showing it as a "BUY" is it now time to sell? wonder how a Contrarian view to comsec would go ?

BUYS- NWS, TLS, ERG, BIL, CML, BPC

SELLS- BHP, RIO, WRM, AMP, AMC, TAH

 

[RichKid]

Re: ERG has flatlined...

It ain't over yet folks, bearish close below 35c but huge buy depth- but it does vary, not always reliable.
Remember one contract isn't everything, they didn't make a profit out of nothing (but then I haven't done the math but no one has criticised their accounting). Chart shows the volatility and the amount of support. Clearly people are still in two minds about the timing of the recovery ('buy now or wait for more news' or sp would have collapsed imo), hence movement around 35c before closing below resistance. Close above 35 suggests confidence in turnaround, anything much above that is additional good news imo (eg contract win), just a guess atm. I may re-enter as things become clearer. I haven't done that much research on ERG. I'm bearish atm because of two closes in a row below 35c and no pattern to trigger entry.

Today's intraday:

 

[ghotib]

Re: ERG has flatlined...

Do you pay attention to the proportion of shares in play, or just to volume trends? If I've understood the data correctly, ERG has about 610million shares issued (Capitalisation $208million / share price 34 cents). The highest day's trading volume was around 40million, which is 6.5% of issued shares. Just looking at the ComSec 12 month chart, average volume looks like about 50K - statistical noise. Isn't that pretty low, and hence pretty risky, for short-term trading??

I have some confidence in this company because management has stuck to its plans and met its forecasts for about 4 years. They had a LOT to do to repair the company and they won't be finished till they've implemented some major, revenue generating projects, which is why I think the current price makes sense and don't really expect to see much change for months. But I don't see the stock as a good candidate for technical trading (unless buying on rumour is technical, in which case I'm out of the loops anyway). Am I missing something?

Thanks

Ghoti

 

[tech/a]

Re: ERG has flatlined...

Ghoti.

Technically its not a trade.
However with 40 million traded someone thinks that those selling are
selling great value stock.

Sure they would be buy and hold.
It wont be a technical buy until it makes a new high (In my opinion) the real risk now is that this could just labour and do basically very little for ages.

 

[RichKid]

Re: ERG has flatlined...

No quick recovery for this one, 35 is a great level to watch now.

 

[markrmau]

Re: ERG has flatlined...

Comsec is showing it as a "BUY" is it now time to sell? wonder how a Contrarian view to comsec would go ?

BUYS- NWS, TLS, ERG, BIL, CML, BPC

SELLS- BHP, RIO, WRM, AMP, AMC, TAH

Last year I would say just do the opposite of commsec and you will be rolling in dough. However I have to say that this year, they seemed to have wisened up a lot, and they are not (always) buying duds that have just had a massive drop, or selling at the beginning of a massive up-trend.

I remember looking at the chat rooms last year where someone was saying they sold ANZ after it went up 20c or so. It went on to go up by a few $ from memory.

 

[RichKid]

Re: ERG has flatlined...

Poor ERG, looks like it's back to downtrend or at best the current base consolidation pattern. I prematurely thought it had completed the base. Looks like there are a few more stages of it to go yet. This is one to be cautious about, maybe short term trades in it but long term picture is a different story.

 

[RichKid]

Re: ERG has flatlined...

Do you pay attention to the proportion of shares in play, or just to volume trends? If I've understood the data correctly, ERG has about 610million shares issued (Capitalisation $208million / share price 34 cents). The highest day's trading volume was around 40million, which is 6.5% of issued shares. Just looking at the ComSec 12 month chart, average volume looks like about 50K - statistical noise. Isn't that pretty low, and hence pretty risky, for short-term trading??
................
Ghoti

Good point Ghoti, I didn't pay attention to it. I think Tech answered the Q.