FMG - Fortescue Ltd

[jjbinks]

FMG seems as though it may turning the corner on the weekly down trend. However, it is early days with rising prices on low volume. (Perhaps low trade volume during holiday period I guess)

 

[Ann]

FMG seems as though it may turning the corner on the weekly down trend. However, it is early days with rising prices on low volume. (Perhaps low trade volume during holiday period I guess)

G'day jjbinks,

FMG announced a A$500 million buy-back starting from 25th October 2018 which is expected to run for up to twelve months. This is likely to add real value to the shareholders and should see a healthy rise in the price, one would expect. I am seeing from the time of the announcment on the daily chart, higher lows. Higher highs have yet to come perhaps.

 

[Ann]

I am putting up a chart specifically inspired by tech/a but hopefully others may enjoy how I like to enter a trade. We were discussing the ability to be successful using 'vanilla' charts alone to gain a successful trade over in the Dump it Here thread pg 41 #801 and on . Of course there is much more to it than just getting a chart right. When I see a chart with potential I then ask myself why would it continue to rise? My answer with FMG was a share buy-back. I am sure it is not always the case but the few I have been a part of have done very well. Before I buy into a stock I look around for any potential hazards. Check various indices and look at how the markets are travelling.

FMG was going to be picked up for my portfolio as it was setting up really nicely. As this is a 'commodity' stock, I checked the $CRB Index, found that FMG is part of the CRB Index and became seriously disturbed at what I was seeing. In fact it so disturbed me I have decided to wait and see and not buy in as I feel there is a high risk of failure of a successful trade in the near term. If I am wrong, I can always pick up FMG on another support re-test if I still want it. Here is a link to the CRB Index explanation I just put up for clarification. https://www.aussiestockforums.com/threads/crb-index.34478/#post-1009610

This is how I like to enter a stock, higher lows, higher highs, above resistance lines and wait for a re-test of a potential support, then my 'sweet spot' of entry. It is not rocket science, nor is it the holy grail. It is very basic chart reading along the lines of the KISS principle, anyone can do it.

 

[InsvestoBoy]

I checked the $CRB Index, found that FMG is part of the CRB Index

huh? The CRB index is an index of commodity futures, there are no equity components.

 

[tech/a]

So FMG is a set up you’d usually take but you haven’t because you think it has a high risk of failure.

For me it was a buy 8 periods ago with a stop below the October lows on Binks’s
Chart.

Still doesn’t indicate a near 100% success rate?
Any charts you’ve posted up and they have gone on with it!

This is really basic stuff Ann
Anything better than 50/50 would be amazing

 

[Ann]

So FMG is a set up you’d usually take but you haven’t because you think it has a high risk of failure...........

Correct.

..............This is really basic stuff Ann
Anything better than 50/50 would be amazing

Correct Tech/a it is very basic stuff, so basic it works. Anything as poor as 50/50 returns and I wouldn't bother.

 

[tech/a]

Well your not giving me any evidence it “works”

Could you post up say 5 of them as they set up
I and I’m sure others would be very interested.

 

[tech/a]

Correct Tech/a it is very basic stuff, so basic it works. Anything as poor as 50/50 returns and I wouldn't bother.

Why not
It’s NOT about win rate
It’s about profit

I can make massive profit and be wrong 70% of the time!
Everyone “can”

 

[Ann]

Why not
It’s NOT about win rate
It’s about profit

I can make massive profit and be wrong 70% of the time!
Everyone “can”

Good onyamate! Go for it!

 

[tech/a]

Ann do you seriously think the only way to profit in trading is win rate?

 

[Ann]

Ann do you seriously think the only way to profit in trading is win rate?

No.

 

[tech/a]

Thank goodness.

 

[Ann]

Well your not giving me any evidence it “works”

Could you post up say 5 of them as they set up
I and I’m sure others would be very interested.

Missed this post.....yes I would be happy to do that tech/a. A setup I would trade from I am hearing you say? I am not going to work it to death as I would if I planned to trade it. And I would not be recommending the stock just demonstrating how I enter a stock for those who would like to learn the first steps. Happy to do this if I can find five at the moment.

 

[tech/a]

Excellent
Look forward to it

 

[Ann]

This is related to the previous chart on post on #2843

I indicated a 'sweet spot' for entry (red circle on this chart, star on the last chart). The sweet spot was around the 4.40 - 4.50 level. There has been a small pullback from the top of A on the chart but not a real re-test of the support line at B level. It did pull back to my potential entry price but if I had actually been going to trade this I would not have entered at this time. I would wait until that B level is given a proper re-test. If the stock continues to run upward, I would reconsider the trade. Three things I never do, chase trams, chase men or chase stocks. There is always another tram coming, men and stocks often come back but it depends on my mood as to whether I am still interested. I may have found something better in the meantime!
I had intended to enter this stock but I am not happy with the markets at the moment, I don't think I am alone if you look at the current volumes. Capital protection is very important, so entering a trade at a weak period in the markets can can offer extra risk for a failed trade and loss of money.

 

[tech/a]

Well I still think it was a buy back at the low with high volume
On jj’s Chart
So we differ on this one.
I don’t see any reason to sell if anyone was in it.

 

[tech/a]

Another chart.

 

[Ann]

Well I still think it was a buy back at the low with high volume
On jj’s Chart
So we differ on this one.
I don’t see any reason to sell if anyone was in it.

I am simply using this as an example of how I would trade this stock. I am not recommending any action of either a buy or sell or suggesting anyone is right or wrong. It is merely showing my style of a trade. It may not suit everyone or anyone for that matter, but it has been very successful for me. All things in this life are subjective, how a chart is read, are our emotions upbeat about a stock, what are our biases, do we feel comfortable about the markets. All of this will come into play when we trade. When a stock comes to a high point and then a bit further down the track it equals that top, it is then I tend to exit a stock. This can work for me or against me, sometimes I lose the very tip of the top price. Sometimes I totally eff up and lose a really good stock which just goes on and on. But I am not greedy, a good profit is always a joy!
I draw horizontal lines of support and resistance in order to give myself an indication of the weakness or strength of a stock as seen in this weekly chart. The green lines are my potential support lines and the red lines are the resistance lines. I like these on my weekly charts it is a good indicator for me as to a stocks strength or weakness. For instances if this stock fell to the green line of $3 and bounced, I would regard that as a strength. If it began working its way back up again with higher lows and higher highs, I would be most impressed and probably enter the trade if the markets were looking OK.

 

[tech/a]

I am simply using this as an example of how I would trade this stock. I am not recommending any action of either a buy or sell or suggesting anyone is right or wrong. It is merely showing my style of a trade. It may not suit everyone or anyone for that matter, but it has been very successful for me.

Ditto

All things in this life are subjective, how a chart is read, are our emotions upbeat about a stock, what are our biases, do we feel comfortable about the markets. All of this will come into play when we trade.

Here we differ.

When a stock comes to a high point and then a bit further down the track it equals that top, it is then I tend to exit a stock. This can work for me or against me, sometimes I lose the very tip of the top price. Sometimes I totally eff up and lose a really good stock which just goes on and on. But I am not greedy, a good profit is always a joy!

Many have gone broke taking profits.

I draw horizontal lines of support and resistance in order to give myself an indication of the weakness or strength of a stock as seen in this weekly chart. The green lines are my potential support lines and the red lines are the resistance lines. I like these on my weekly charts it is a good indicator for me as to a stocks strength or weakness. For instances if this stock fell to the green line of $3 and bounced, I would regard that as a strength. If it began working its way back up again with higher lows and higher highs, I would be most impressed and probably enter the trade if the markets were looking OK.

Again different here but that's fine.

 

[Ann]

Many have gone broke taking profits.

So far so good!

Again different here but that's fine.

Thank goodness we all trade differently.