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WOW - Woolworths Group

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From $36.00 to $33.16 in two (2) days. It would appear that the level of growth for the quarter was not as high as expected and the experts have sold Woolworths down almost 10% in two days trading. In my humble opinion this is either a stupid over-reaction or a deliberate trading strategy. The key word that appears to be being overlooked is "growth". Woolworths continues to grow, Woolworths is larger than Coles and year in year out Woolworths continues to grow and pay good franked dividends.



I bought in today and will happily hold for the recovery. As always, do your own research and good luck.

Edit: If it gets any cheaper tomorrow I will probably top up.
 
If you waited for an entry at $32.50 it looks like you may have missed the train. Opened at $33.30 (up $0.10c on yesterdays close) and never looked back.



Money for jam. Two (2) day trades closed out and one trade still live. Might duck down to woolies and see if they have some English marmalade and low price bread for my toast tomorrow morning. As always do your own research and good luck.
 
nulla nulla said:
Money for jam. Two (2) day trades closed out and one trade still live. Might duck down to woolies and see if they have some English marmalade and low price bread for my toast tomorrow morning. As always do your own research and good luck.
Click to expand...

Great work nulla. Fantastic gain for such a short hold. I bought in today but will hold for the long term.
 
Woolworths opened yesterday at $34.25, tested an inter-day low $34.185 (failing to reach down to my bid at $34.15) then spiked up to an inter-day high of $34.51, before being pushed down to trade for most of the day around $34.34.

Although 955,657 shares turned over at $34.34 through the day and 1,037,234 shares turned over at $34.35 (most of it in the closing auction), the volume weighted average price for the day was only $34.297 due to five (5) cross trades totalling 1,165,181 shares at the previous days closing price of $34.13. It would appear that some investors were more than happy to accumulate at the $34.34 - $34.35 level.
The MACD chart shows the closing price as diverging below the moving average price.
The Relative Strength Chart shows the closing price as returning to (but slightly below) the moving average price which at close of trade was $34.68.
Volumes of shares traded have been higher than average for the preceding six (6) days. Personally I don't see Woolworths testing $32.50 (or $30.00) in the near future, particularly with Christmas coming up.

As always do your own research and good luck.
 
Nulla,
As long as you understand my quoting 32.50 was in answering the newbies post for "what would be a good buy for a long term hold".
Your trade is going well, do you mind me asking what software you use for the depth ?
Good analysis there. cheers
 
dlineinvestor said:
Nulla,
As long as you understand my quoting 32.50 was in answering the newbies post for "what would be a good buy for a long term hold".
Click to expand...


No problems, I agree if it gets that low it would probably be a good entry point if you were considering a buy and hold strategy. Probably a viable trade entry point as well.


dlineinvestor said:
Your trade is going well, do you mind me asking what software you use for the depth ?
Good analysis there. cheers
Click to expand...

I use commsec/webiriss. Their "trade analysis" screen can provide some pretty useful information for inter-day monitoring as well as back checking.

Today looked like more accumulation to me around the $34.34- $34.35 range. The initial price jump on low numbers got pushed back fairly quickly but there was plenty of support in the low $34.30+ area. I would expect the share price to test resistance around the $35.00 next week. Then again I could be completely wrong. As always do your own research.
 
Interesting, I just started trialing D2MX, you probably know it the newest version of what u use. I like the depth and analytics
It will be nice if the market momentum carry's
Cheers,
 
I noticed that WOW has formed a Quasi Fractal, the replica at the higher degree of trend.
It satisfies three main criteria for the fractal to be valid: form, number of waves and Fibonacci relationship with a Base Fractal.
Both fractals have the same form of an Expanding Leading Diagonal.
Both have five Waves.
The Base Fractal is 61,8% of a Copy Fractal.





Usually Quasi fractals are a good indication that the main trend will resume and prices will expand higher. In real time I use them when they are confirmed with a wave count-this combination makes an entry point almost without defeat. But this time unfortunately EW contradicts as the Top has been reached in three waves, which I consider as a B wave of an Expanding Flat.
This means that Wave C is in Operation now which could reach targets between 26 and 30 in y2015. The key level is 32.40, when(if) breached, will confirm that price will collapse further.

As per Alternate count Intermediate wave (2) is already upon us, and WOW is sporting series of first and second waves (second waves as a fractals), accelerating in a third wave.

Implications of this development long term are bullish-WOW is in a correction, and the question is not if it reaches New All Time Highs, but When. I am a buyer.


 

Are you buying now at the present level $34.35ish or are you waiting for an entry at $26.00 - $30.00?
 
And Rimtas how does this reconcile with your earlier comment that you are looking for ~$30 next year?
 
No guys, I am not buying now. I have a lot of patience and can wait for an entry many weeks and months, as long as it takes for the market to sport a good opportunity. Good oportunities are rare, just once or twice a year, but when picked up on time, they reward you generously.

I understand that the bottom could be in already, but current structure has alternatives and I do not like losses. To reduce risk, the market must reduce the number of alternatives, it would be best to zero

So the short answer is-yes, I am waiting cheaper, but I will buy it one way or another, just need a good entry point-it's when you buy and the stock rallies straight away.
 
Hmmm, if it keeps getting pushed down like it has for the last nine (9) days, I might have to eat humble pie. As at 10:30am today it has already tested $32.65. That $32.50 target of dlineinvestor isn't so unbelievable after all.
 
UBS took an axe to its view of Woolworths yesterday, apparently. Downgraded its rating from "buy" to "sell" (bypassing "hold") and cutting its 12-month target price from $39/share to $31/share. UBS forecasts a full-year FY15 earnings per share of 199cps, compared to a consensus forecast of 203.3cps.

This was from my FN Arena daily email this morning.
 

I figured someone had downgraded them to "sell". Todays turnover was fairly high. As at yesterday morning a few analysts had reassessed them as "neutral" and "underweight" but there were still a few "hold" ratings and one or two "buys". The UBS clients must have headed for the door enmass. I suspect the sell down price was a bit excessive for a forecast earnings difference of 4.3cps.
 
If price does not hold at $31 or $29 then its coming back all the way down to $26!!!
 
WOW has taken out an important 32,4 level today, confirming the scenario I discussed above. This point marks a "point of Recognition", where almost everyone starts looking not how high WOW could rise, but how deep it can fall. I call it a sentiment shift from positive to negative-it is normal when the price enters into a second half of the decline.

Even some brokerage companies waited almost 7 months and a price decline of ~20%, and only then they issued a "sell" recommendation.
This is typical behaviour-most brokerage firms have a "Buy" near the tops, and "sell" near the bottoms. When the last of them still holding "buy" will capitulate and downgrade, sentiment becomes extreme and the bottom follows-it could be an anecdotal yet everyday situation.

Recommendations are a very good sentiment indicator, because usually anyone issuing them has a linear thinking-they think that if fundamental situation is worse than before, it will get ugly later. But in reality fundamentals just follow the market and situation is worst at the bottom, and vice versa- looks shiny near the top.

Wave structure is a key when applying a sentiment indicators, and at this point WOW does not has a count that would enable for a bottom setup.
Also, when Quasi Fractals fail to produce the same directional movement, prices usually collapse in the opposite direction aprox in the length of the Copy Fractal itself, giving an ultimate target area at around 28 mark, which coincides with the previous Triangle apex (see chart above). So I expect lower prices from here in the weeks to come.
 
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