Tuesday, 2 October 2012

ASX 200 is testing key resistance after hours around 4450

The ASX 200 is testing key resistance around 4450 in after hours trade, after the cash index closed at 4433 this afternoon. The break of the trend line zone drawn from the 2007 high looks like a good 'un BUT the market needs to clear 4450 and preferably 4500 before an up trend can be declared at this time frame.

Stops tweaked and risk reduced on growth stocks model portfolio positions

Today the portfolio added a new position and tweaked (tightened) the stop losses for the four existing positions. The stop loss levels listed yesterday were nominal due to me running out of time to write up details for each trade in a format I could be happy with for this site.

Working through the positions one at a time, briefly. This portfolio aims to ride strong up trends for as long as they continue to be strong up trends. In this post I have shown monthly charts, as they are the most suitable for clearly illustrating stop loss levels.

Trade entered due to stock hitting new highs and showing smooth long term up trend. Any deviation from that smooth up trending behaviour would be reason to bail. 
Stop loss set at 8.29 (illustrated with horizontal line), below most recent significant lows and also below 2011 highs.
Risk to portfolio 0.78% 

Trade entered due to stock nearing new highs and showing possible Cup and Handle pattern with a target of around $100 (pattern not illustrated, but can''t you see it?). That said, this trade needs to prove itself with more urgency than the other trades in the portfolio, as the up trend is not so well established. For that reason, stop is tighter, and risk to portfolio is negligible.
Stop loss is 53.17 (illustrated with horizontal line), below most recent long green candle.
Risk to portfolio 0.29%

Trade entered due to screaming new highs. Screaming new highs can collapse in a flash, so risking less % of portfolio on this trade than most. Only interested in riding this stock while it hits new highs each month. October has already seen the September high beaten.
Stop loss has been set immediately below the September low, at 7.03 (illustrated with horizontal line).
Risk to portfolio 0.51%

Trade entered due to stock hitting new highs after a long period of consolidation. So long as stock remains above highs of consolidation, ride the new up trend.
Stop loss set at 38.31 (not illustrated), immediately below the July green candle that broke free of the consolidation highs  (illustrated with horizontal line).
Risk to portfolio 0.86% 

Trade was entered as stock is nearing new highs, and is showing a Cup and Handle pattern within another Cup and Handle Pattern, giving a measured target of close to $5.
Stop loss set immediately below most recent significant low, at 2.20 (illustrated with horizontal line).
Risk to portfolio 0.96%

Portfolio summary is shown below. The annualised return of -49.66% after just one day is somewhat comical, but could be taken as a reminder that brokerage costs can be a killer of portfolio returns! For simplicities sake I have added 0.5% brokerage to the Cost of each position, and also subtracted 0.5% brokerage from the Value of each open position, for a total brokerage cost of 1% of position value for each completed trade. You can likely find cheaper brokerage.

This post is not trading or investment advice. Please read full disclaimer.

CBA added to growth stocks model portfolio

CBA a growth stock? Perhaps not by traditional definitions, but given that it has more than doubled in the past 3.5 years, and has history of doubling and doubling again over the decades, and it is now nearing record highs, it'll do me.

In any case, as tweeted this morning, stock was added to the portfolio at today's market open.

CBA - Commonwealth Bank of Australia
Bought 89 @ 55.91
Stop Loss 53.17
Risk to Capital 0.29%

Chart and words to follow in a later post.