I closed the trade today at a small lost. Gold stocks in general tanked with the XGD down 2%. NST outperformed slightly down only 0.4%.
There is little doubt that the chart and fundamentally (namely short term gold price direction) the stock is heading in one direction over the medium term... But the trade wasn't about the chart; it was about the stock experiencing an out-of-whack match due to index rebalances. It was an attempt at capturing the mean reversion.
Here are some of the other Friday out-of-whack stocks and how they performed... illustrating the positive expectancy of the opportunity presented by the index-rebalancers.
View attachment 59506
P.S. I have only included something that looked obviously impacted by the match. There may be many others in addition to what I have listed.
P.S. If one does not want a directional risk he/she can hedge the trade with a trade in a peer in the opposite direction. E.g. Long NST and short NCM on the close would have yielded a better outcome than a straight long NST.
As described above my intent was only to capture the mean reversion over the following trading session. So don't take anything out of my 1-day long position in NST.
Did some rewind since Nov 2013 on NST price. I am not expert on chart but chartists like Pixel (sorry mate to put you on spot because you always provide good value information) said out of NST when price was 0.93 and chart was there. Then NST went up and up. Again it started sliding down and today it was $1245 or so. Should I leave hope and prove with chart ? I personally will not and think with solid technical base and steady rise it is an opportunity to buy (I however unloaded my stuff to book profit earlier) as done by SKC.
I have dumped a chart (COmmsec source) and believe with heavy sell out it gives an opportunity.
1.245 -1.190% -$0.015 1.450 1.150 1.275 1.275 1.192 12,535,131
Bottom line for me - if I am that intelligent then many of my reds would have been green so please DYOR.
When gold was around 1700 NST was around 1.50. About where it is now. Make sense?
Market has a habit of overpaying and underpaying.
The art is to know when it is about to correct itself.
When things don't make sense I like to make a note of it, I don't think it has to make sense.
I rather like it when it doesn't.
Then when it looks like it's realised it has not made sense.
I step in and try to help it realise.
All eyes on tomorrow!!!
So what's your plan?
Short it through CFD
Buy it on a dip ( doubt it if it's already being over payed )
I shorted it throughout yesterday afternoon.
Not a full position and was very surprised at the bullishness of it.
I suspect it was from amateur Christmas traders whilst the heavier hitters are on holiday.
This one tends to trade like it reads tea leaves at Hot Copper - very amateur - so I occasionally back myself against tech bull or bear.
I was long so just kept selling cause Fairfax were pumping up the gold moves that I could not see at all on the US ETFs and this goldie was way out running others in our market.
It's last updates have been less than stella!
What was interesting from the bull side however was the moves at the close of quite a few goldies on Fridays close.
Big volume buying went through.
See if they all jump off today by watching volumes today to see how serious the selling will be.
Had a bad night in US last night.
Bought in lots of little chunks and at the close yesterday afternoon.
Then offloaded it at between 1.445 and 1.47 today with the predictable excitement of people fleeing gold on morning testosterone!
It wasn't a trade I was particularly feeling smart about even though "it went my way"
So now I look for confirmation of what it did yesterday in relation to the rest of the Gold market.
I'm still nervous about the 16 stocks I identified of having a bullish close on Friday.
They all jumped on that high volume close so I was thinking it was interest over supply.z
Really I should have stayed long in my opinion.
That must be coinciding with what you think you see is a trend change up. I hope we're right for a position entry (not in NST though).I'm seeing gold in my dreams at the moment. Literally!
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?