FMG - Fortescue Ltd

[nomore4s]

Out of interest do you operate on a percentage stop? or set price level?

With FMG I struggle with where to place my stop as I believe it will run further and the stop cant be too close incase of gaps.

Currently I have it at 3.98 (which is 7% away) but I feel its prob a bit loose and will move it up to circa 5%

It depends on what I'm trying to achieve with the trade. Generally it is price levels but I do also use percentage stops to protect open profit.

When they run hard like this I generally put the stop to a position that will protect some profits but give it plenty of room to try and capture a larger part of the trend - especially when the market is showing very good strength atm. I can always exit or tighten stops if a bar or bars appear that I don't like. My current stop is at $3.85.

The patterns I posted earlier especially the daily chart indicate that a sustained trend may be about to start but with stocks like FMG you can never be sure. Here is a chart with some similar principles marked on it.

 

[DVEOUS]

An extract from an article on Business Speculator (Saturday 25/7);

Agreement in sight on iron ore talks
By Alfred Cang of Reuters
SHANGHAI - When China's steel executives meet next week for their biannual meeting, issues such as first-half performance and oversupply may take a back seat as the industry body braces itself to be grilled about its protracted iron ore talks with global miners...

The full article can be found here; http://www.businessspectator.com.au/bs.nsf/Article/PREVIEW-Eyes-peeled-on-China-iron-ore-deal-as-CISA-U9C9R

Although most of what we read in the media over these Iron Ore negotiations has to do with RIO and BHP, what effect on FMG, if any, do you feel there will be on FMG?

If a deal is finally struck, indicating some confidence that things are moving forward, could we see a small rally in FMG later this week/next week?
Or, would a discount arrangement have a negative impact on SP?
(Given China is paying spot prices ATM, which is significantly higher than what they are trying to negotiate).

Friday's close of $4.33 was quite a fall from the $4.60 peak in the first minutes of trade that morning. Getting quite volatile at these levels.
Peaked $4.55 on June 10. Seems to have resistance around here.

I am really stuck, as to what to do.
Do I sell my FMG very soon, bank a profit, and wait for this pending correction in equities that the media were writing about this morning. Then buy back in again later.
OR
Do I simply hang onto FMG?

Keen to hear your thoughts on where the Iron Ore miners might go in the very short term.

 

[Nick Radge]

I am really stuck, as to what to do.
Do I sell my FMG very soon, bank a profit, and wait for this pending correction in equities that the media were writing about this morning. Then buy back in again later.
OR
Do I simply hang onto FMG?

The trend if your friend until it ends, then it bends.
You'll never make a large profit by taking a small profit.

Disclosure: I hold FMG.

 

[Miner]

SELL RECOMMENDATIONS BY Peter Rudd, Balnave Capital PUBLISHED IN BULL ON 27 JULY


Fortescue Metals (FMG)

Iron ore production levels for the June quarter rebounded strongly on the March quarter, which was impacted by heavy rain. The group’s high operating costs need cutting to lift profitability as mine output ramps up to full production.

I do not hold FMG and recommend do your own research. Often these brokers manipulate market. Bell Potter also said SELL after which the price has gone up by 80 cents. I wrote a note to the analyst and he / she never responded.

 

[DVEOUS]

Hmmm, it's 13:40 local time, and they've gone in pre-open.
Bids are now higher than offers.

I see the (market sensitive) announcement about Glacier Valley, but there is no announcement of a trading halt.
Wouldn't pre-open status during the trading day indicate a halt?

I guess it will all come out in the wash later tonight/tomorrow.
Lets see if this can break that resistance at $4.55-$4.60.

 

[DVEOUS]

Sorry, false alarm there.
Trading status changed back to normal after about 10 minutes.
Price did spike up to $4.49, but then retreated well back from there.

 

[LeeTV]

China on the prowl for smaller Oz miners
05 August 2009 @ 11:08 am ET
http://www.ibtimes.com/articles/20090805/china-on-prowl-smaller-oz-miners.htm

KALGOORLIE, Australia - Who ever said China's loss of face over Chinalco's collapsed $19.5 billion Rio Tinto tie-up bid would curb the country's hunger for Australian natural resources?

Chinese state-owned and privately-held metals firms are actively on the prowl for acquisition and financing deals with Australia's small and medium-capped miners of base metals and iron ore, analysts and bankers say.

"I reckon there's still a few in the cards, there's still more to do -- particularly in steel-related products," said James Wilson, an analyst at DJ Carmichael.

"You can't shut the door on these guys because they are related to the long-term health of the mining industry here," Wilson said, adding that Chinese companies account for a huge proportion of Australian mining firm's customers.

"It's a symbiotic relationship these days."

China's hunger for Australian assets is far from satisfied, two regional investment banking sources told Reuters, even though most of the distressed deals have already been completed earlier this year in the immediate wake of the global financial crisis.

New potential buyout or financing deals may include Australia's smaller iron ore players, the likes of Atlas Iron, and small base metals firms such as Kagara Ltd -- anything involved in steel making or infrastructure to assist in China's massive modernization drive.

Just last month Australia gave the green light to China's Guangdong Foreign Trade Group to take a 19.9 per cent stake in debt-laden Kagara.

Rumors are also swarming China Investment Corp (CIC), the country's $200 billion sovereign wealth fund, is eyeing a financing deal with Fortescue Metals, Australia's third largest iron ore miner.

What is more, Fortescue's boss Andrew Forrest is expected to ultimately sell his firm sometime in the near future -- even after Fortescue struck a $438 million stake deal with China's Hunan Valin Iron and Steel Group earlier this year.

"I think that Andrew Forrest is definitely a seller," one Hong Kong-based banker with knowledge of the Fortescue-Hunan Valin deal said, adding that Forrest may prefer to develop the company more before he exits at a higher price.

The banker predicted that Chinese firms, including Hunan Valin Iron and Steel, could be interested in buying Fortescue.

Both bankers declined to be named to protect client sensitivities.

Analysts say, there will be scant political opposition to such deals, because they will be with smaller-sized companies, and won't attract headlines such as Chinalco's failed $19.5 billion mega tie-up attempt with household name Rio Tinto.

"At the end of the day, its the shareholders who vote on these things," said DJ Carmichael's Wilson.

 

[LeeTV]

Merrill Lynch Reverses Iron Ore Contract Price Call to 10% Gain
By Jesse Riseborough
Aug. 7 (Bloomberg)
http://www.bloomberg.com/apps/news?p...d=a4EoJFIcq4g4

Iron ore contract prices may rise 10 percent next year on demand from China, said Bank of America Merrill Lynch, reversing its estimate of a 5 percent drop.

Steel mills may pay 106.6 cents a dry metric ton unit for Australian iron ore fines in the year starting April 1, Merrill Lynch said yesterday in a report. That compares with this year’s 96.9 cents and the bank’s previous forecast of 92.1 cents.

Cash prices for Australian ore delivered to China, the world’s biggest buyer, have risen 38 percent this year. China’s imports surged almost a third in the first half as the government’s 4 trillion yuan ($585 billion) stimulus program spurs mills to produce more steel for automobiles and buildings.

“Iron ore’s seaborne trade is recovering spectacularly from the steel market’s massive fourth quarter 2008 correction,” Merrill Lynch analysts led by Michael Jalonen and Tom Price said in the report. “2009 is a far better year than seaborne iron ore producers ever expected. We are now modest bulls on iron ore.”

Australia is the world’s largest exporter of the steelmaking ingredient. Rio Tinto Group, BHP Billiton Ltd. and Fortescue Metals Group Ltd. are the nation’s three biggest exporters respectively.

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net;

 

[sammy84]

Anyone care to explain todays price action. I had a chartist recommended trade in, which managed to catch my entry trigger and my stop in the one day. Would seem to be a very large reversal....Need to get home to check my charts.

 

[skyQuake]

Reporting results. Pretty shabby results after taking out all the crap. Sat there for a few minutes before it collapsed.

Then again, entire index was sold down heavily today.

 

[LeeTV]

Reporting results. Pretty shabby results after taking out all the crap. Sat there for a few minutes before it collapsed.

Then again, entire index was sold down heavily today.

What part of it is shabby? Profits up. Cash reserves up. Operating costs down. What part am I missing

 

[LeeTV]

Can someone explain to me the last 2 after hour trades? Why the price is 4.41? I'm not clear on the conditions either i.e. XTOS and XTSXOS

04:56:12 PM 4.410 32,042 141,305.22 XTSXOS
04:50:44 PM 4.410 128,170 565,229.70 XTSXOS
04:42:54 PM 4.160 15,000 62,400.00 XTOS

 

[Dark1975]

Can someone explain to me the last 2 after hour trades? Why the price is 4.41? I'm not clear on the conditions either i.e. XTOS and XTSXOS

04:56:12 PM 4.410 32,042 141,305.22 XTSXOS
04:50:44 PM 4.410 128,170 565,229.70 XTSXOS
04:42:54 PM 4.160 15,000 62,400.00 XTOS

Yes,The above after trades are called "Portfolio Special Crossing"in short :These are brokers making adjustments on trades which took place in the day,and have to be made transparent to the market,So usally done after hours.

 

[LeeTV]

Yes,The above after trades are called "Portfolio Special Crossing"in short :These are brokers making adjustments on trades which took place in the day,and have to be made transparent to the market,So usally done after hours.

Many thanks I have wondered what these were especially when some are worth so much yada yada yada

 

[skyQuake]

What part of it is shabby? Profits up. Cash reserves up. Operating costs down. What part am I missing

Look at the 91 paged report instead of the shorter easier to read one.

Lots of juggling with fx and other 1 time stuff.

Didn't do as well as mkt expected. Couldn't make any real money despite all the hype.

 

[DVEOUS]

Yeah, WTF? !!!
I didn't think the short report was that shabby, so it was either a big co-incidence, or something else.

I did note that whilst the SP was falling away, Commsec indicated there was an announcement, but it took an eternity for the latest announcement to actually appear. (Probably 10 minutes or so)... which ended up being the short report.

And to think I almost put a sell order in at $4.60.
To close at $4.12 hurts.

 

[Dark1975]

hmmm wow what a jump 2.41est pm and i thought i made a good gain when buying today @ 4.02 And selling @ 4.10....../CRY

 

[skyQuake]

Oh sweet, bought at $4 and missed getting filled at $4.11, decided to hold for arvo
Apparently china doing some convertable bonds stuff with fmg. No idea what it means, but its apparently bullish!

 

[Dark1975]

Oh sweet, bought at $4 and missed getting filled at $4.11, decided to hold for arvo
Apparently china doing some convertable bonds stuff with fmg. No idea what it means, but its apparently bullish!

Nice work,well done on the gain.Where abouts did you see the announcement with china and FMG? I have trade pro platform,currently looking through fmg announcements and cant see any info besides yesterday's 2009 fin/ report?

 

[fureien]

yeh where did you see it. i cant find it either.
what were your reasons for buying at $4? it was tempting but too risky for me. if i you posted the bonds stuff then i mightve considered it.