HVN - Harvey Norman Holdings

[ctp6360]

Hi Everyone,

This is my first big trade (as in I have put a decent amount of cash on the line - its not more than 2% of my total trading capital though) and the first where I have used "technical" analysis as my basis for making the purchase. My main goal in this trade is to test out the theories I have been reading about in "Trend Trading" by Daryl Guppy to see if I can apply them effectively and to see if they work for me.

The second goal of this trade is to see that, regardless of any flaws it contains, if I can follow my plan to the letter without letting emotion dictate my decisions.

Here is my plan for this trade:

Max Chase: $3.25
(I ended up getting in at this price having put my original bid at $3.23)

Reason for buying:
- In an established uptrend
- Guppy Multiple Moving Average says uptrend is strong and is likely to continue

Stop Loss:
- If price falls below resistance level at $3.18 at end of day, I will cut losses and sell (I found the price $3.18 by using a countback line but didn't include this on the graph)
- I will use a trailing stop loss based on the count back line to lock in any profits if they arise.

Here are my very amateurish chart analysis for HVN, I have only used two indicators in my analysis, a trend line which I am 100% sure is plotted incorrectly, and the GMMA which I absolutely love, I hope it works for me in the market as well as it does in theory (famous last words).

My motivation for posting is:
1) I am interested to hear what people think about my primitive analysis
2) I want to get my trades out in the open because this will provide additional emotional stimulus to follow my plan to the letter.

 

[Happy]

Re: HVN - Harvey Norman

EOD 31 Jan 06 my CBL stop was close 1 cent below low $3.12 on 24 Jan 06
Bars taking part in CBL placing were 27, 25 and 24 Jan 06

There is a bit of grey area, and some place new CBL stop loss as soon as there is new equal high, which happened on 31 Jan 06.
After equal high, some would take 31, 30 and 25 Jan 06 bars, and this is probably correct as stop can only go higher, making it $3.16

Yesterday’s close changed stop loss again to $3.21 , 1 cent below bar on 30 Jan 06, and bars taking part in setting CBL were 1 Feb, 31 Jan and 30 Jan 06

Why I write all this, is that none of my CBL stops is identical to yours, I can be wrong.
You are talking support, and this is valid idea to set stop around support area, but CBL stop is rather locked to volatility than support.

Not sure what others think and which idea is more correct?

 

[ctp6360]

Re: HVN - Harvey Norman

Happy yours is right and mine is wrong. Sorry I actually lost my CBL calculation and picked $3.18 because it was a number I was comfortable with. Your calculations are right and mine are wrong, I put those lines on my graph because they are the numbers I am playing with in my head, not because of any calculations...very sorry I misled you like that!

I am glad you hold HVN as well and that I'm at least close to the right track...I revised my stop loss up to $3.22 last night so your figure of $3.21 is closer and since I have no doubt yours is more accurate I'm going to go with that instead

What did you think of my GMMA analysis, Happy?

 

[Happy]

Re: HVN - Harvey Norman

GMMA analysis has supporters and opponents.
Some, me included are quite comfortable with GMMA, as it looks convincing, some are totally against it and they probably have a point too.

Moving average is kind of feel good interpertation of events.
Many, me included, and from what I can see you too, think that MA is too slow as trading signal.

We have other means of control to take loss or profit, like support or CBL for example.

 

[ctp6360]

Re: HVN - Harvey Norman

Harvey Norman got raped today and has fallen to $3.16, disappointing for me but will be a good chance for me to be diciplined and act on my stop loss.

I still think this will continue its uptrend but I am going to follow through on my original plan.

 

[Happy]

Re: HVN - Harvey Norman

I think good decision.

Market plays mind games and if we second-guess what it might be, we stray from trading plan and pay hefty price when stock doesn’t bounce back.

Re-entry technique, as new trade, with new entry and stop is much better alternative.

 

[mime]

Re: HVN - Harvey Norman

Good luck with your trade. Looking at your graph you may have bought in too late but I'm not really skilled in charting so wouldn't know.

I like to pick stocks through external factors. If there is a ecomonic slowdown the retail sector is the first to feel it. Of course if there isn't there are good times ahead.

If you do get burned of the trade don't give up.

 

[arco]

Re: HVN - Harvey Norman

Hi All

Here's a weekly HVN chart I posted on another forum on 16th Jan.

The message I gave at the time was "HVN could still have some more to go..........(if the red box breaks north) "

regards - arco

 

[jkool]

Re: HVN - Harvey Norman

I cant believe its almost a year since the last posts here about HVN. I wonder how you guys went after all and if you managed to hold on to this stock as it seems to have gone a little since than (same as everything else

I also tried to analyse their last annual report on my site http://sog.shopinthemall.com/2007/01/19/australia-harvey-norman-holdings-ltd/
and so far I like it best amongst the aussie retailers.

Its as aussie comp as it gets with Gerry Harvey himself still holding around 30% of the stock and other top managers another 48%. Thats probabaly why they manage the business as if it was their own Seems to me that they are reluctant to take much debt on board and are still making decent returns on their existing equity year after year.
On the downside, HVN's shareprices are always pretty high (measured by P/e) as I suppose the stock is held in high regard with most of the share investors so jumping it now could be too costly.

I am wondering what others have to say.
Cheers

Jkool

 

[Buffettology]

Re: HVN - Harvey Norman

^^^^^

Couldnt have said it better myself jkool.

Its a stock I am waiting to buy up big on, but again, it is overpriced so I think I will wait for this bull to end.

 

[Garpal Gumnut]

Re: HVN - Harvey Norman

^^^^^

Couldnt have said it better myself jkool.

Its a stock I am waiting to buy up big on, but again, it is overpriced so I think I will wait for this bull to end.

Last week I thought about buying HVN but decided against it after looking at its chart.

Its in a decent uptrend but seems to be running out of steam.

Having said that Gerry or some fund manager seems to come in with a big buy order every May which over the last 2 years has pushed the price up , only to fall later in the year.

I've put an RSI on the chart and note a divergence between price and this indicator each March to May, followed as I said above by a retracement to a previous congestion level about Sept/Oct.

Anybody else looking at HVN.

Garpal

 

[Uncle Festivus]

Re: HVN - Harvey Norman

I'm thinking it's looking a bit overextended but then again a lot of stocks do. If you go by the chart we may have some sort of top forming for a head & shoulders pattern. Too scared to short in this market though

PE approaching 20 - how does this stack up against other retailers?

 

[finnsk]

Re: HVN - Harvey Norman

Hit alltime new highs this morning came out with strong results last friday look strong on the chart will hopefully go for a little run, is not sure if this is what is called for bluesky territory.
Holding

 

[watsonc]

Re: HVN - Harvey Norman

Solid performer, still trending up in a downward market. Despite interest rate rises, the strength of our $A will make technology and lifestyle products which Harvey Norman sells much cheaper to the public. I guess holders of HVN are expecting a strong Xmas spend-a-thon.

Any thoughts?

 

[osmosis]

Re: HVN - Harvey Norman

Now trending down in a temporarilyrising market (for now anyway). Is this a buy at this price for the long term?

 

[subaru69]

Re: HVN - Harvey Norman

Sir Harvey was just on Lateline Business -
'I'm a mug, why didn't I wait to buy the shares at $3, I bought heaps at $4.5 and $3.9'
'I'm just shell-shocked'

And a little bit of blatant self promotion -
'We sell TV's and washing machines for less than we did 10years ago, why would you fix it? Just come in and buy another'
'I picked up our catalogue, I couldn't believe how cheap our stuff is'

Not that I own any consumer discretionary stocks, but I'm glad I'm not the only one who bought on the way down for them to only get cheaper. If the CEO/founder can't pick his own SP, then who can?

 

[Real1ty]

Re: HVN - Harvey Norman

Sir Harvey was just on Lateline Business -
'I'm a mug, why didn't I wait to buy the shares at $3, I bought heaps at $4.5 and $3.9'
'I'm just shell-shocked'

And a little bit of blatant self promotion -
'We sell TV's and washing machines for less than we did 10years ago, why would you fix it? Just come in and buy another'
'I picked up our catalogue, I couldn't believe how cheap our stuff is'

Not that I own any consumer discretionary stocks, but I'm glad I'm not the only one who bought on the way down for them to only get cheaper. If the CEO/founder can't pick his own SP, then who can?

That was an hilarious interview and he is so down to earth is old Harvey.

It's a pity the interviewer was so serious and didn't get into the spirit and have a laugh about it.

Just judging from that interview it would appear Harvey has little knowledge of stocks as he has been buying financial and CS and it seemed like his rational was that they used to be X now they are Y so they are cheap.

He was flabbergasted and used catastrophic several times but the funniest part was when she asked him if he was going to buy any more he and he simply replied "I've lost my courage"

I don't own any CS but HN is one i will be looking at if there appears there might be a good time to get in, although like everything it's very unclear atm.

Funny interview and worth a watch for anyone that wants a bit of a chuckle.

Shame it wasnt Ally Moore doing the interview, it would have been even funnier.

 

[tommymac]

Re: HVN - Harvey Norman

It's been a while since anyone's talked about this share.

What are people's thought's given the recent sales announcements and share price?

tommymac

 

[Santoro]

Re: HVN - Harvey Norman

The aussie dollar decline resulting in increasing electronic goods (once stock on hand is turned over) prices this can't be too positive for HVN. If unemployment starts to increase the consumption is sure to slow.

(e.g Dell released the inspiron mini at $599 and stock sold out a couple of weeks ago, they have new stock but at $699, so if you looking for electronic goods get them now while current stocks last)

Clive Peeters Ltd says it expects to post a loss in the first quarter of fiscal 2009 as weakened consumer confidence translates into subdued trading for the electrical goods retailer.

The company said conditions would remain challenging for the remainder of 2008/09 but the government's recent economic stimulus package and interest rate cuts had improved prospects for the Christmas trading period.

link to article

and stock prices haven't increased yet....

 

[AS414]

Re: HVN - Harvey Norman

There has to be some concerns about their international ventures too:


http://internationalbs.wordpress.com/2008/12/04/oh-harvey-oh-harvey/