Caution: Shooting star candles

This was the subject line of an urgent mail sent to our trading and investment clients on Tuesday morning 9h05!

Caution: Shooting Star candles across the stock markets and indices especially for Resources so take caution today.

We considered that short term traders should take profits and that investors be aware of a pull back but to use it as an opportunity to add to their existing investment positions at a discounted price in the resource rally.

Some prices have already bounced including Kumba our preferred stock pick. It pulled back to the moving average as support at 31600c and is now sitting right back at 330000c in just 2 days.

Platinum stocks had a similar experience. Some sectors like construction failed to secure a higher top so therein lies a potential opportunity to short the sector and construction stocks like Murray (target 4000c) and Group 5 as well to name a few.

We also discussed how the pharmaceutical sector have topped out and are due for a pull back and it happened this week. Aspen is now testing the 50ema support at 7000c and for medium term investors could prove to be a fair entry level as this is off the high of 7350 or so and provides an opportunity to enter with a 5% discount. It may be early however. Consider confirmations...

GOLD Futures reached $1145 and beyond in the recent rally discussed from $1075 low. The dollar yoyo effect is playing havoc with short term position calls so it is best to wait it out until the dust settle and take the next swing position as it comes.

Keep an eye on TECH stocks.

Best stock trading this quarter.

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