Pavilion103's LIVE ASX Momentum Setup Trading Thread

[Nortorious]

No problems at all lads, I will stick to posting continuation breakouts on this thread. Usually scan the market on a Saturday morning to find these setups so if I see anything worthwhile I'll let you all know.

 

[Boggo]

Trading Update: Exits triggered on CAJ, PAN, WOR.

The exit price for this portfolio will be the next open. This avoids any concerns about the portfolio exit price. Conditional sell orders can be used where there is enough depth eg. PAN, WOR.

That is a pretty tight stop on CAJ imo.
I haven't looked at the other two but I am holding CAJ for at least another day.

(As an aside, any views on the way ILU may be shaping up)

(CAJ - click to expand)

 

[peter2]

CAJ: Too tight, probably. We got into the trade at 1.01 and price hasn't moved enough to raise exit stop, but I did and now don't want to change my mind (second guess). Must be decisive on a public forum, but we know what really happens.

I've posted my chart so you may compare the bar colours. I'm using supertrend (2atr(10),midpoint).


ILU: One of my fav trading stocks. My reversal trade (123L) is done and I'm waiting for a low risk (~0.50) buy signal. A 1.00 risk is too big for me. Price has only recently moved above sloping R line. I'm anticipating setup >8.50 as there could be plenty more potential profit (to 10.00 then 12.00). Glancing at this chart daily.

 

[tech/a]

Thought HFA OK for volume Boggo.

Here is another I found

View attachment 62111

Smacking along! Both this and CAJ look good setups.

 

[VSntchr]

Smacking along! Both this and CAJ look good setups.

Yes, HFA announced today that they have divested the loss making Aus division. A nice setup where breakout and good news collide.

 

[Boggo]

Smacking along! Both this and CAJ look good setups.

HFA certainly travelling nicely tech/a.

Nortorious's pickup on ABX going well too (weekly chart is a better picture of it).

Some good setups still appearing and some such as CAJ seem to be fairly predictable in their behaviour.

 

[tech/a]

Yes, HFA announced today that they have divested the loss making Aus division. A nice setup where breakout and good news collide.

HFA certainly travelling nicely tech/a.

Nortorious's pickup on ABX going well too (weekly chart is a better picture of it).

Some good setups still appearing and some such as CAJ seem to be fairly predictable in their behaviour.

Don't you love it when it all comes together.
Any minute now that Murphy blokes gonna pop up!

 

[Boggo]

I'll post a bit on HFA on its thread to avoid derailing this.

 

[peter2]

We have some cash available (~11400) as we sold a few this morning.

Candidates: (suggested by) - My comments

CAL: (tech/a). Still moving up, although cautiously. Buy BO to new high (>1.10, iSL - 1.00)

ALU: (tech/a). UP trend looks strong, buy BO to new high >4.50 (iSL - 4.25).

EPD: (Nortorius), Has difficulty closing above 0.80 (weekly). Buy if it trades back at 0.83 (iSL - 0.75)

TNE: (PeterJ) Nice narrow range. Buy new high at 4.05 (iSL - 3.90)

WBA: (PeterJ). Broke above yearly highs (1.40) with good volume. Supply above 1.60 stopped price, which has been trading sideways on low volume. Buy at 1.55 (iSL - 1.45)


BAL: (P2). Clearly in a strong trend. Price in narrow range. Buy BO >2.90 (iSL - 2.75). Looks like this one has been busted.
HFA: (VSntchr). This one went up too soon for us. I was concerned by low volume, but good pick.
IRI: (P2). Noticed this one yesterday, but no cash.

Maybe I should apply the Commsec trading conditions. Buy if we have the cash or not and settle in 3 days time. Heh.

I thought Murphy popped in on that down day last week.

 

[tech/a]

I was concerned by low volume

Just a comment on this comment.

Its been my experience that trading to new highs on volume is at least an initial sign of weakness.
Nearly always will a new high on volume turn back lower before moving on if it does!

Lower volume breakouts are more likely to be continuing breakouts as supply is not evident at that level.
People are holding so higher volumes are not forthcoming as supply has retreated.

Really its a matter of determining how price reacts to volume and or range.
It really is an intriguing subject!

 

[Boggo]

Just a comment on this comment....

Really its a matter of determining how price reacts to volume and or range.
It really is an intriguing subject!

And one that I will get my head around one of these years hopefully

 

[peter2]

Intriguing, absolutely. Does a break-out on very high volume have a higher or lower probability of success than a break-out on average volume or below average volume? You would think that all the back-testers would have a quantifiable reply by now. I think other factors such as the daily market sentiment have a significant effect on those probabilities. Take a day like today (big UP day) and most stocks are up. Sellers generally have backed off, but they'll be back when they get spooked again. It won't take much volume to create a BO on a day like today.

IMO it's a daily mix of supply/demand and sentiment. All three components change each day and even during the day.

 

[tech/a]

Intriguing, absolutely. Does a break-out on very high volume have a higher or lower probability of success than a break-out on average volume or below average volume?

Breakouts on volume are clear indications of effort in a direction--long or short. High volume only comes about when there is supply that wants to get out at prices traded.---I'm convinced that price movement is driven buy supply and NOT demand.---that's a topic!

You would think that all the back-testers would have a quantifiable reply by now. I think other factors such as the daily market sentiment have a significant effect on those probabilities. Take a day like today (big UP day) and most stocks are up. Sellers generally have backed off, but they'll be back when they get spooked again. It won't take much volume to create a BO on a day like today.

Ive spent a lot on looking for that definitive answer. I'm also convinced there isn't one where all variables are considered in the question you pose above. In RAW terms---does an increase in volume mean price will move in that direction the RAW answer is ---short term no--long term likely if---(add ifs). Your brain can quantify theses ifs if trained instantly and there is the face in the crowd. To turn volume questions into Yes and no answers gives you a lot of nos and then lots of yes's when your trading! You have added an if---strong bullish day---not that I use it myself!

IMO it's a daily mix of supply/demand and sentiment. All three components change each day and even during the day.

Weekly and Monthly as well.
Buying/Selling/Balancing.

 

[peter2]

Back to the business of trading and a few thoughts that come to mind. We are not going to get into every opportunity that turns out to be good. Interestingly we forget the ones that didn't work out and focus on the ones that started well that we didn't buy. I'm talking about possible trades in XTV, HFA and IRI.

There's a huge difference between paper trading equities and real trading. Most people immediately mention the difference in our emotional states. No fear, no greed and no concerns about where we place our exits when there's none of our money involved. Yes, that is huge. However there are other less discussed differences. Consider order placement, if they're not in the market then they can't be executed. How many of you actually take the time and effort to write your orders in an order book when you paper trade? It takes time and effort to log in to your broker's platform and place every order. If you want to paper trade properly, then log all your orders. I'm posting the orders in this thread and won't start a trade without them (*). It's too easy to pretend that we got into a great trade without placing any orders.

Another subtle difference when paper trading equities is the money. This is a finite resource and once it's used it can't be transferred to another trade until it's made available by selling something. Keep track of the money. Know how much is invested and how much is available for the next trade. When you get your portfolio established you'll notice that there is very little cash available most of the time. The great trades start when you have none. I don't know how many trades I've started with partial positions because I've run out of cash and these turn out to be great trades. Argh.

I'm mentioning this to the few of you who are creating and managing your own portfolio of trades with the goal of starting for real in the new FY.

Paper trade these next three months with absolute integrity.

(*) I may post an occasional trade before the close after doing my pm scans. These will be rare.

 

[myrtie100]

I have a suggestion - DMP.

 

[peter2]

You had me thinking; DMP?
Debt Management Program
Dual Media Player (nah)
Decision Management Process - for our exits - yeah.

Then it hit me Domino's pizza. Strong trend UP, good trend continuation setup for a BO trader.
My buy would be 37.50 (traded today) with a iSL at 35.00 for short term traders, at 34.00 if I wanted to give price more room.

I can't fault the selection, however I can fault myself for not buying any of the dozens of BO opportunities over the past five years. Seeing that I'm irrationally biased against this stock, I'll let you place the buy order.

I definitely want to include DMP in the portfolio as it's a good pick and it's posted by a member with very few posts. I would like the portfolio to be constructed with picks from lots of ASF members.

What are your instructions Myrtie100? Are we going to place an order in the market tomorrow? What type a limit buy or a pending buy order to buy if a higher price is traded? I'm in your hands.

 

[myrtie100]

Oh dear! now the pressure is on

I would put a buy order in at $36.73 and watch the open to make sure it didn't gap down passed this price.

If we miss out at that price - nevermind there are plenty more to choose from!

My initial stop would be $35.12.

 

[Boggo]

I think that anyone posting up a stock should also explain their entry and stop etc ?

Not trying to inhibit yours or anyone's posts myrtie100, it's too easy though to just pop up a stock symbol without some additional info.

I think that Joe addressed a similiar issue on another thread a while ago.

Just my

 

[peter2]

Yes, that's what I want, to make you feel a tiny bit of responsibility. There's no pressure because nobody knows what is going to happen next.

I'll give posters with <10 posts a lot more freedom in order to get their suggestions and I'll help them frame their trade. This is primarily an educational thread. Those with hundreds of posts should know how to frame a trade.

A quick reply to myrtie100 before I get out of the office for some exercise.

You've selected a stock where the price has started to move higher and you anticipate that it may go higher sooner rather than later. You don't want to miss this opportunity by placing a bid that is too low. DMP could open at $37 and go higher immediately. Your bid (36.73) won't be executed and you miss this opportunity to get into this trade.

I think you should place a higher bid (~37.50) to try to ensure you get it tomorrow. If it opens higher than 37.50, you will miss it also. If it opens lower than 37.50 you will get the open price.

 

[myrtie100]

Oh ok.....
I like to buy close to the broken resistance line on minor weakness rather than chase the price up.
The stop is placed just under the ccongested area. In fact the stop could be tighter, if price goes that far the trade is not travelling as expected.
Is that what you mean bongo?