Experimenting some TA

[GTM 3442]

I guess it would make sense but I'm not planning to trade in the US anytime soon, and that is because of the NZD/USD rate not looking so good at the moment. I was mostly thinking of using it on the ASX for now due to the stop-loss option and the lower commission rates but then I would need to do more researches and comparison between brokers. As well as receiving feedbacks from the whole transfer process, for which I'd rather not play the role of the guinea pig

Ah, OK, I have only ever heard IB mentioned in a US context.

Shame abut the guinea pig though. It's possible that I might want to do a spot of that in the future, (although for reasons of concentration, rather than diversification) and it would be nice to have had that guinea pig.

Oh well, c'est la vie. . .

[blu3]

Im thinking you will not have the required patience for this game

And I'm thinking that you're coming to conclusions too quickly! Isn't all of us allocating a small part of our portfolio for some “fun” experimental trades? Are you really planning to spend the 2 next years twiddling your thumbs waiting for the next bull market?

Also, I will definitely focus my efforts (and portfolio) towards the proven “buying in an uptrend” consensus, but I am not willing to close any door for alternative thinkings. After all “conventional wisdom produces conventional results”, thanks M. Mark Minervini I'm sure that there must have been some winning stocks in each bear market in the past and it would be interesting to figure out what they have in common—not saying that this is the reason why I would have bought ASB though.

Shame abut the guinea pig though.

Sorry to disappoint

[ratkin]

Naturally some stocks rise when the general index is falling, but its much easier rowing with the current than against it

[Longhaul]

You dont twiddle your thumbs. You go short in a bear market. If you dont want to go short then you sit out.

KW - what are the shorting options we mere NZers have?

[blu3]

You dont twiddle your thumbs. You go short in a bear market. If you dont want to go short then you sit out.

Would you really recommend shorting to a beginner? To me it looks like the priority would be to focus on a single strategy, such as buying in uptrends, to understand and execute it well before thinking of diversifying (outside the experimental “fun” part of the portfolio).

Well, I guess that even when sitting out there would still be plenty of work to do to be prepared for the next bull.

[Longhaul]

To me it looks like the priority would be to focus on a single strategy, such as buying in uptrends, to understand and execute it well before thinking of diversifying (outside the experimental “fun” part of the portfolio).

Yeah agree with this. I'm focusing on riding momentum with short term upswings. Shorting is something I will look into once I'm comfortable with my current approach. Glad I took profit off the table on Friday (with XRO). Something even as simple as taking profit can be hard to do!

[blu3]

I guess it depends. Could you drive your car only going forward and never using reverse?

True fact: most Paraguayans can't reverse properly in a 20 meter wide parking spot! Joke aside, I understand that it makes sense but I'm just concerned that it will be confusing for a starter. I'll see if reading these put me in a more comfortable spot where at least I'll understand the basics behind shorting, then I guess I'll have to open that Interactive Brokers account even though I've got no idea if it's possible to transfer my holdings and cash at lesser cost?

[blu3]

Please do not consider what follows as me discarding your advices about not buying when the market is going down nor as me lacking patience—I'm fine playing with the devil on a very small monetary risk, for experimental purposes.


Buy: TGR (ASX)




I've been watching this one for about (only) a week, and been waiting to see if the price would break through the $4.4 resistance. It did it yesterday, with almost double volume from its daily average, and also broke through the $4.5 mark where a few sellers seemed to be aligned to take profits. Whatever happens, I'm happy already to have convinced myself to buy a stock at its all-time high, and I'm hoping for a true breakout of the SP as a reward!


Solid uptrend:
- +46% from its 52-week low
- all-time high (no overhead resistance)
- price > daily MA 50 > daily MA 150 > daily MA 200
- all MAs are pointing upwards
- higher highs and higher lows (but previous pullback to daily MA 50)
- large volume on up weeks
- DMI+ > DMI- on both weekly and daily charts
- MACD-H pointing up on both weekly and daily charts


Fundamentals showing growth (from the little I understand):
- recurring earnings: 309.79M (FY 2015, +16.19%), 266.631M (FY 2014, -2.26%), 272.805 M (FY 2013, +3.85%)
- NPAT: 49.992M (FY 2015, +21.75%), 41.061M (FY 2014, +22.73%), 33.457M (FY 2013, +19.12%)
- EPS: 0.34 (FY 2015, +21.5%), 0.28 (FY 2014, +22.56%), 0.23 (FY 2013, +19.1%)
- dividends: 0.14 (FY 2015, +21.74%), 0.12 (FY 2014, +22.56%), 0.1 (FY 2013, +18.75%)
- ROE: 13.39% (FY 2015), 12.01% (FY 2014), 10.6% (FY 2013)
- cash: 13.234M
- debt: 79.038M
- gearing ratio: 17.6%
- P/E: 13.29
- beat EPS estimates 3 years in a row: +10% (FY 2015), +9% (FY 2014), +24% (FY 2013)
- recent increase in EPS estimates for FY16: from 0.348 1 month ago to 0.355 (+2%)
- industry leaders (food/fisheries)


Catalysts:
- extension of supply contract with Woolworth for a further 3 years, and new contract to supply Aldi for 12 months. Announced on 30/06/2015 (pdf).
- acquisition of De Costi Seafoods to increase growth. Announced on 01/07/2015 (pdf).
- barriers to entry, making it hard to compete against, except for HUO which is the second largest producer.
- demand growing in China?
- new ready-to-eat product.


Risks:
- pressure from possible environmental impact due to planned growth in production but for now it seems to be heading in the right direction with Tassal's CEO winning the Richard Pratt Banksia CEO Award that recognizes sustainable/environmental efforts. Announced on 16/11/2015 (pdf).
- warming climate leads to increasing chances of deseases (and losses).
- probably much more


Trade strategy:
- entry price: $4.53
- stop price: $4.27 (-5.74%)
- target price: not really


The tight (manual) stop loss is in case the SP is currently going through a false breakout. I have no idea what to aim for a target price since there are no upside resistance from the current prices, but the idea is to let it run while probably setting a (manual) trailing stop loss.

[ratkin]

The tight (manual) stop loss is in case the SP is currently going through a false breakout. I have no idea what to aim for a target price since there are no upside resistance from the current prices, but the idea is to let it run while probably setting a (manual) trailing stop loss.

Great effort, if you put that much effort into all your buys you will do well.
Personally i would have moved the stop lower, at around 3.98 to give the trade a chance to grow.
If this was a planned short term trade your stop might be fine, but for longer term trading i have found it is best to give more leeway.

It would be interesting to have other opinions on the stop for this one

[blu3]

Personally i would have moved the stop lower, at around 3.98 to give the trade a chance to grow.
If this was a planned short term trade your stop might be fine, but for longer term trading i have found it is best to give more leeway.

In fact I initially defined this stop loss thinking that I would get in at around $4.4, which was even tighter than what it is now! I've indeed read that longer-term trades benefit from more relaxed stop losses, which is the type of trade that I'm hoping to perform, but the other reason for making it tight is the current riskier context, that is the overall S&P/ASX 200 being in a downtrend. My thinking is that I prefer taking a smaller loss and getting in again later on if the price goes back in the right direction. After all, the rule no. 1 is to never lose money, right? And everyone knows about the rule no. 2 But maybe I'm thinking about it the wrong way. What's sure is that I definitely find it hard to come up with such entry/exit prices—I've been doing it a bit too randomly so far.

I'm also looking forward to hear other strategies if anyone is willing to chip in!

Cheers!