NZ stocks in Uptrends.

[Phaedrus]

I have received a written complaint (from a reptile that must remain nameless) to the effect that I have been posting altogether too many charts of Australian spec stocks and shamelessly neglecting sound local stocks.

Here, then, is an assortment of NZ stocks that have each broken a confirmed trendline, reversed their downtrend and are now in an uptrend. The green arrows mark trendline-break "Buy" signals.

The 6 plots are all remarkably similar.

http://h1.ripway.com/Phaedrus/NZsix.gif

[belgarion]

By Golly ... I've been buying 4 out of the 6 for the last 2 months.

Go Ph - tell us who the reptile was. I suspect he vastly overrates your influence. Would you like me to point that out to him/her?

[777]

But Lizard is a good contributer.

[upside_umop]

Hey P,

Thanks for the charts. What are you thoughts on FPA?
Bought a couple today.

[Abracadabra]

I would have thought that seeing you are kind enough to spend your time posting charts, you could certainly choose which charts to post.
However, in saying that I am very grateful to see these new charts. I have realized it is very easy to get hung up on mining stocks and ignore everything else. Which would appear to be a big mistake at the moment, I note Lizard pointed this out in one of her recent posts.
Thanks so much for your post, you have reminded me not to be so single minded.

[Lizard]

Thanks Phaedrus. I apologise for my petulant demands. :o

It is just that I am puzzled by this forum - so much air time devoted to spec oilers and miners in steep downtrends, when all these quality NZ shares (and a host of others) have made gains, from trend-break to current price, averaging around 18% in under a month ... more from the absolute lows.

Two things - firstly, it is a bit late to be getting excited about the individual stocks for which the buy signals are a little late to be of use. However, I would be disappointed if Phaedrus was wasting his time trading spec oilers or even waiting in cash for spec oilers to put out "buy" signals, while missing gains of this magnitude.

Secondly, while it is too early to draw conclusions, I think it is worth watching what is happening here - although it will take a few more months to play out and establish whether a longer term uptrend is about to form. Many of these stocks were in downtrends or range trading well before the current bear market began on the NZX.

CAV's big high was 2003 near the beginning of the bull run. The most recent slide started in early 2007. It is close to the long term downtrend and poking through the long term support/resistance at about $2.45.

FPH hit the high in June 2006 and hasn't quite broken through the long term downtrend, but is closing in.

SKL peaked in Nov 2006 and broke the long term downtrend earlier this year - very close to establishing a long term uptrend, though it would probably need to steepen to cause excitement.

HBY peaked in early 2005. It has broken a steeper downtrend established since end of 2006 and would have to go back to around $3.50 to hit the very long term downtrend.

NPX broke uptrend in early 2007 although it hit a high again later in the year. It has broken this 9-10 month downtrend.

GPG hit highs in about August 2006. If today's price gain holds, we may see the long term trend line break.

In summary, although the NZX50 hasn't yet broken the long-term downtrend, there are a host of stocks which began their long-term down moves before the NZX50 and which are now breaking that trend. This is surely not an insignificant observation?

(I will go back under my rock now!)

[troyvdh]

Phaedrus..if you would be so kind....Aff has gained some 80 % in the past 2-3 months...no big surprise to me given that fundamentally 'all the ducks are starting to line up".....as you being a chartist ..did you pick this...and if so why....

Cheers IA

[belgarion]

Two things - firstly, it is a bit late to be getting excited about the individual stocks for which the buy signals are a little late to be of use.

Little late? Liz, I'd suggest you may be a little late if your time horizons are measured in weeks. But if measured in years (and mine are to avoid captial gains tax) then there's still plenty of time.

On the HBY thread I stated I would be buying under 2.20 and predicted that the market would probably sell HBY down to NTA. It did. This didn't phase me one iota. I have continued buying on most down days and continue to buy on down days. CAV is always on my radar as its a well managed company with clear long term trends. The recent steep fall in price was my trigger to buy up a few and I continue to buy. My views on GPG are well known - buy under 1.40 and wait. GPG provides great margin lending opportunities and is a good hedge against NZD fluctuations. The other two (sorry I said 4 above, should have been 5) are both NZD currency hedges but they have quite a bit of upside as I feel they are undervalued.

One not mentioned by Ph. is PPL. I continue to buy here to as the upside to a long term hold is huge! The next result may freak a few out but I'll probably still be buying. I came in when the first retail guru came in and was thrilled to see another join the register. Such validation seems to have escaped the market! Also PPL is something of a NZD hedge too.


Secondly, while it is too early to draw conclusions, I think it is worth watching what is happening here - although it will take a few more months to play out and establish whether a longer term uptrend is about to form. Many of these stocks were in downtrends or range trading well before the current bear market began on the NZX.

Too earley to draw conclusions? I think not. From a macro view NZ is well placed to experience only a very mild downturn. Prices at the farm gate and high employment and tax cuts will see to that. The stocks I've mentioned above have, as you have pointed out, been in downtrends for some time. It is now their turn to turn back.

(I, too, will go back under my rock now!)

[_Michael]

Must say that I agree with Belgarion in the sense that I am looking and thinking about what some of these companies will be looking like out five or ten years.

PPL is good example and when industry experts like Duke and Cameron are buying large, then you just have to know there is value there.

Lots of these companies will have messy results FY08/09 but in my seems to me are already priced for worst case scenario then some.

[craic]

Rakon seems to be rushing upwards at the moment. Can't help wondering if some insider knows something that we don't - or maybe an offer in the wind?

[Lawso]

CEN is pretty certain to come into play before long IMHO. The Brits have said they won't want it if and when their bid for Origin Energy succeeds. So they'll put Origin's nearly 300m shares up for sale. The eventual buyer, whoever that might be, could very well then make a t/o offer for the remainder. Seems to me to be a good reason to hold/acquire a reasonable stash of CEN and await developments.

[BlackPeter]

just in case nobody noticed so far :) : Sanford is developing pretty nicely as well, DGL is raising, and (though slower) no complaints from my side about PGW! It is certainly not all doom and gloom!