Trading Platinum from support

We recently took a short term trade in platinum going long as the commodity found support at $1531. Our profit target was $1610. As the dollar was expected to go weaker commodities generally go higher.

We held the short term trade in platinum until $1600 with a profit of $70 we were happy to close the long position.

For a bigger view of the above chart click on it.

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Short Sell Positions

As per the Shooting Stars I discussed last week, they were the warning of the top end of the global stock markets and since then, global stock markets have pulled back in a major sell off starting yesterday.

Taking short (selling) positions in the DAX, FTSE and S&P 500 indices have reaped some very good returns already. We are taking profits at this point or at least moving stops into profits and closing half the position.

A number of opportunities will present themselves for short term traders or swing traders early next week once the pull back consolidates and then begins the next bull wave.

However, if certain critical levels of support are broken today then there is likely an extended sell off in the short term as the dollar strengthens in the very short term.

Stock markets around the globe are feeling the pinch as the dollar gained strength and forced commodities across the board to cool off. This provides an excellent opportunity to short term traders to be able to take short positions, but preferably with entries yesterday.

This dip in the global stock markets and commodity prices also provides an excellent swing trade opportunity to go bullish again in the next wave. Timing is important and should be considered only after hammer candles present themselves.

Watch the dollar for any weakness at resistance levels. Keep an eye out for support levels on the right levels.

Best trading this quarter.

Trading Mentor.


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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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Dollar Weakens & Commodities Rally!

Dollar Weakens & Commodities Rally!

It's not entirely what I was expecting but the global markets seriously rallied today after the dollar took a pounding (ahem, excuse the pun)!

With that being said about commodities rallying, GOLD hit a new high again and is well on its way to my medium target of $1350! So hold on to the rodeo horse cos it's going to be a fun ride!

My favourite share of the moment, Kumba also closed up very strongly today. I missed the entry at 25000 by R1.00 on Friday with my automatic order in the system. Sometimes you get the trade, sometimes you don't. It would've been a fantastic entry however as the share closed R9.00 up from low of Friday.

Also, Anglo American and PSG were good trades today and I like the look of Datatec too. There is some convergence of the moving averages on that chart.

Platinum also pulled back on Friday and although it didn't quite reach my support level it certainly did weaken considerably. It gave entries to my other favourites Lonmin and Northam platinum. Both up on the day with Lonmin moving over R10 to the good which puts it at about 5% for the day. Can't complain!

Short term trading can still be exciting on day's like this when the markets run in your favour and you know you going to bank some serious profits over the next day or two. Stock market trading is not supposed to be a full time job. Learn to take short term trades with high profitability over time with consistent success!

Do this and you write yourself cheque for life! And you can enjoy life with some stock market trading inbetween!

Trade well, not often.

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Global markets at resistance

"Global markets at resistance" was the main heading for my recent issue of Stock Market Outlook, a trading newsletter I write for a club membership database on a weekly basis.

This weekly investment newsletter and trader's update focuses on the global indices, global commodities and then local stocks in South Africa as well as the Resources index and FINDI index.

I spoke about trading KUMBA Iron Ore last week Monday when it opened at 23200 and ended up at 26600 yesterday. Only 8 days to achieve over 10% return! That's no playing around! It's also not geared either. My medium term target for Kumba is 32000.

I was long of S&P 500, Wall Street and DAX last week to close near the highs of the top of the channels on these indices.

This week, the focus was off the stock markets and onto gold again. After sitting on $1000 it rallied back to my target of $1150within a very short space of time.

Now I wait for the global markets to settle at or near their support levels on the channel. Once this happens which should be by early next week I will be taking short term trades in the stock market again.

As the dollar weakens, commodities will rise. It is a patient game waiting for the dollar to turn, find resistance in its decline and then continue its downward movement. It is the opportunity to take longs on commodities again and stocks that mine those commodities.

It's fascinating but there's always something to learn.

Short term trading is't all its cracked up to be. People have a romantic disbelief about how exciting it is. The reality is that trading is mostly boring and repetitive.

It's a great hobby for retired persons and people who have wads of money. It is NOT for someone trying to replace their job.

Some people however, can find the happy medium of having a job and being patient while waiting for the trades to come. Building confidence in their trades but also mental discipline. Lastly growing their portfolio size over time like a professional golfer.

Support levels on the S&P 500 are 1093 in the short term. For the DOW it be 10100. The DAX is around 5400. KUMBA support is 24900 but could extend to 24400 odd intraday before closing on a hammer candle formation as example.

Watch the dollar. Keep an eye on the Baltic Dry Index. Copper is also a good early indicator as prices start to edge up.

Have a great trade,
Warrick








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Stock Market Bull Rages

It's been a while after my blog break. I was focusing on helping to put together a stock market course for people interested in learning how to do this actively. I guess that's why you found this blog... To search and seek out more knowledge about investing!

Well, the Integrated Trading System we have been working on includes global fundamentals and combines them with local stock market sectors and charts them so that technical analysis on a sector and share level is quite unique. We get a very high hit rate on our stock trading using this integrated stock market course approach.

I have also been spending a good deal of time overhauling my other business venture's website: beekeeping equipment supplies! That's right. I supply any beekeeper with the equipment they need to get started and grow their golden opportunity. The site hadn't been updated for a good long time and this month it got tagged.

The beautiful thing about beekeeping is that it can be the ultimate alternative investment opportunity. You see, it's a low cost, low capital setup and the bees do pretty much all the work... It's a sweet deal with all that honey and all. Bees are great.

I reworked all of the keywords and the links within the site and even added a new beginner beekeeping course. If you looking for something alternative for investing beekeeping could be it.

This week th emarket had a great rally. A fantastic turn yesterday on the ALSI 60 min chart gave an entry long at 19600 and after the gap up this morning gave 500 pts for the taking. That's the total weekly quota I set myself in less than 48 hours.

The Anglo American trade also triggered long from 19200 yesterday and closed today at 20800 at resistance there. Anglogold Ashanti gave a sinister short term trade this morning at 31500 to 29500 for a decent day's work.

Our integrated Stock Trading approach warned us that last week's sell of was a pullback buy opportunity and we looked to buy shares like Old mutual, Aspen and Sasol amongst the short list which produced a massive 10% on average across the portfolio in just 2 days! DO you agree that this is profits worthy of short term trading?

After today the Johannesburg stock market has once again resounded it's bullish rage and charged in a red-eyed flurry to break resistance levels confirming what we have been saying for months now: The bear market is over. The bulls are preparing to charge again. Buy on pullbacks unless critical support levels are broken on global fundamental charts!!!

Well, it's really good to be back!

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Stock Market going ahead

Market Outlook
Week starting 20th April

RESI or Resources Index Outlook

A lopsided Evening star candle formation confirmed by red candle presents itself on the chart of the resources sector. We also have a descending triangle as well with a break down level target of 36800. With the short-term trading range has been between 36800 – 41400 which the trader should take note of in order to benefit from support and resistance levels within a 5 – 15 day trading period.

The medium term range has been 43000 – 33400 which is vital to note when looking at a medium term trading period of 2- 3 months.

These ranges can assist you to make decisions either for the medium term or for the short term. The current descending triangle forms part of the short term trade and will test the break down to the downside which could take us to the low range level back to 33400. The level at 36800 needs to be broken before the medium term range low of 33400 can be challenged.

The 89ma is acting as resistance currently. It would need to remain intact. The Stoch indicator is displaying oversold levels but could still move down. Caution should be taken at this point. Confirmation that short term negative momentum is still in play is the reverse negative divergence on the RSI and Stoch 3 indicators.

Based on this I am short in Anglo American at 18750. Implats should've been short as well from 17350 with a possible profit target of 15300 but first 16300 needs to be broken.


FINDI

The resistance at 19500 level is strong. The Financial and Industrial index just bounced off the level and formed an evening star with 18900 as a first support level. The weekly and daily chart suggests short term negative movement with a support level at 18625 and then 18292.

A fair deal of reverse negative (hidden) divergence can be found on the FINDI which suggests negative momentum coming into the sectors over the coming week.

The weekly chart does indicate overbought levels in the short however the medium term indicates continuation of the trend to the upside with the potential for a target level at 21500 est.


SP500 Index Outlook

Sp500 is trading above the 89ma with resistance at 876 level and the support at 89ma which is 843 level. Other levels of support at 824 and 813 respectively. The weekly chart shows that the index is very overbought in the short-term where a 61% retracement would result in a 747 target.

Gold seems to have found support at $867. Keep an eye on Anglo Gold at 26900 support level. If this level breaks down then we could have another down movement in the share. If not however, we could see a return to 28000 and even 30000 which needs to be supported by the move in the dollar price of gold as well as the weakening in the dollar.

ALSI

Evening star plus confirmation. Support broken at 20ema Stoch and RSI showing more negative movement either to 18851 or 18675. Last support is 18630 level.

None of the information in this blog is to be used as financial advice but to be treated as educational in nature. We cannot give advice. It is my hope that you can learn from my experience and knowledge.

If you want more knowledge and practical experience then consider coming on my May Stock Market workshop in Johannesburg. It is for investors already in the market that aim to achieve short term profits as well as improve their medium andlong term investment returns.

Financial & Investment Workshops, ebooks & financial freedom @ http://www.newsweek.co.za/

Implats short and Standard Bank short

What an excellent close to the month and the week. It is my view that the last Friday of the month is profit taking day. The reason? The traders need to pay bills. They need to close their positions generally speaking in order to cover their monthly expenses and start again in the new month. It also gives them the chance to spend some of the hard earned profits... It's tough being a trader you know!

Both the Resources 20 index and the Findi 30 index were way overbought from Wednesday but the market was still riding on the back of a major rally. The question really for next week is whether this rally was a bullish comeback or bearish rally? Some homework needs to be done over the weekend! Look out for my post about this on Monday!

But both the Resi 20 and the Findi 30 were overbought using the stochastic indicator as well as old highs. It was a matter of waiting for the trigger and the turn in the market. Did it turn!! Today the majority of the market has dropped down by around 5% in those sectors or indices.

Personally I was short Implats from 17252 yesterday and held it through to this afternoon for a fantastic profit. I was also going to short Standard bank, ABSA, First rand and Anglo American yesterday however I had a car licence renewal queue to deal with. This took me 3 and a half hours to secure. I find out I also need a roadworthy test as I am transfering the car into a trust.

Then the All Share Top 40 index signalled a short from 13h00 at 19500 which resulted in 500 pts of profit per contract!! The last two days on the stock market have made me a small fortune. I certainly cover my monthly expenses in just 2 days of short term trading.

Learn to use the moving averages and the stochasic with the RSI as your main indicators on the technical side... but it is vital for you to also understand the psychology of the market by using resistance and support lines and comparing global indices with your local ones and then sectors to shares etc.

I will be lecturing at a Derivatives workshop tomorrow. I need to go and prepare for that now. It is all about the theory of how the different instruments work and how you can take advantage of them to gear yourself and your portfolio.

Have a great weekend! For more info on short term trading visit www.newsweek.co.za

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