ATM - A2 Milk Corporation Limited

[davflaws]

Kia ora JTH
Thank you for that most informative post. What does TLDR mean?

[dreamcatcher]

You mean you want to turn this into the cheerleaders thread? No facts, please and definitely no critical posts. Only direction for any share is upwards - right? Please only say things if they sound nice and fluffy ...

Thank you, but NO - Thank You. You might want to write nice and fluffy and cheerful posts ignoring reality to yourself, then you can catch and indulge as many dreams as you like - but please, don't interfere with a useful discussion on a public forum.

Obviously - you cold contribute, though ... why do you think an investment in ATM is at this time a good idea? How do you see the risks and potential rewards based on the companies fundamentals?

Snappy today BP I only agreed with MrB suggestion "go chase rabbits elsewhere, this is too hard and slim pickings" .........While I am in the Buy camp where does that imply I wish to turn this into a cheerleadiers group but constant repeat views become boring.

For my own a2 experience I see a similarity with current SP which proved successful for me over last 4 years accumulating between high 3 - 7 Selling a few yearly now holding a fair sized parcel all free-held.

I see a positive future for a2 once Covid passes and world reopens but not without hicups

China/NZ positive
USA IF - possibility
Mataura Valley Milk - new products
Buy Back - likely
Take-over - probably rejected
UK/NZ - trade deal
618 & 11/11 sales

[dreamcatcher]

@JTH Thanks for the lesson

[aperitif]

A Sunday reading with poor weather around most of the country. Some interesting numbers!!!

https://www.yunzhan365.com/basic/45343576.html

(click the yellow box)

[Lease]

A Sunday reading with poor weather around most of the country. Some interesting numbers!!!

https://www.yunzhan365.com/basic/45343576.html

(click the yellow box)

Excellent information aperitif. So as per the study, China still have huge potential for A2 to penetrate

[RupertBear]

Let's apply some technical analysis and see where we are at, what to be looking for and what the most likely scenarios are.

Monthly Chart: Attachment 12665
- Strong monthly downtrend
- Drop of ~75% from the peak
- No monthly low has yet been set (i.e. no monthly candle breaking above the peak of the previous one)
- Volume has climaxed the last two months, indicating large distribution
- Monthly RSI touched oversold

We can expect at some point that the monthly low will be set (monthly candle breaking above the peak of the previous one). We are setting up for this well at the end of this month, however ATM is a strong bear so we should not be trying to preempt this. If it does happen, after a drop of this size the most likely scenario is a monthly lower high. It would still be a potential monthly bear flag if it topped at anything below AU$10.50, so there's a huge range it can run and still be long term bearish. This must be kept in the back of your mind.

Weekly Chart: Attachment 12666
- We are still in a weekly downtrend (i.e. no weekly higher low and then higher high set)
- Weekly RSI has been massively oversold
- We are still below the weekly 12EMA (bearish)

This is the most important chart if you're looking for longer term entries. Based on the monthly chart, we know to be looking for that monthly bounce (to form a monthly lower high) at some point. For this to happen and have any follow through we ideally need to see the weekly trend change happen. At around current prices (AU$6.35) we are still a potentially weekly bear flag, so this doesn't present a good opportunity for entry at current levels. The bounce on weekly means little to me until we get that weekly trend change.

There are three scenarios to look for:

1. We set a weekly lower high at current prices and drop back and through previous lows to created another weekly bear flag (this has happened every other time. Traders will be looking for shorts around current levels (based on shorter timeframe charts) for this scenario to play out.

2. We set a weekly lower high at current levels, drop back down towards previous lows, however manage to set a weekly lower high, giving potential for a weekly trend change. The odds of this are significantly reduced if the weekly bounce tops in bear flag territory. In terms of actionable information, one looks to purchase on that weekly higher low and sets a stop below the previous low. This creates the ideal risk/reward position.

3. We rally higher ($AU6.85+) and then pull back to form that weekly higher low. If we rally to that level then we know odds are on to set a weekly higher low. So again, you are looking to buy the weekly higher low with a stop below. Near maximum potential reward, minimum potential risk.

Buying this weekly bounce right now for the longer term is a losing strategy. If you want evidence just look at all of the previous bounces.

Daily Chart: Attachment 12667
- We are in a daily uptrend (higher highs, higher lows). Remember that this means nothing in the big picture.
- We are in an uptrending channel
- We have resistance at AU$6.47 from a previous high. We should expect strong resistance in this area as it coincides with the top of the uptrending channel. Shorts will be looking to short this.
- We have a gap to fill around AU$6.85-7.00. Again if this does fill, expect heavy shorting to set that weekly lower high

At this point the daily chart is not useful for those looking to establish longer term positions. Shorter term traders will be looking for quick scalps if we get the gap fill, but at this point the shorters will be getting interested, with a weekly lower high being confirmed if we ideally get a daily down trend. There is heaps of trading opportunity on the daily and lower timeframe charts.

TLDR: unless you are a short term trader, look for that weekly higher low to be set before potential entry. If we the weekly higher low is set at the current level, be aware that there is a good chance we can drop to even lower lows. There's also risk that that if we get a weekly trend change, we may just form a monthly bear flag (fundamentals should determine this). Set yourself up in good risk/reward positions and be okay stopping out if it doesn't go your away.

I should also note that any entry comes with great risk due to fundamentals. Until the company provides further trading and strategy updates there is huge risk of gap up or downs. You can bet big money is monitoring this closely so we will likely see it in the charts before any formal update.

Happy to answer any questions or expand on concepts.

fabulous post thanks Johnnythehorse

[Leftfield]

Exports of Milk Powder ex Lyttleton (per courtesy of Werdplaya on HC) YTD May 2021 v 2020 up 33% (by vol.)

Naysayers will say it's all discounted (and they may be right) but this, plus the TA chart turning more positive, are encouraging signs for this biased holder.

M Powder exports ex Lyttleton to May 21.jpg

That said, I agree with Johnnythehorse;

I should also note that any entry comes with great risk due to fundamentals. Until the company provides further trading and strategy updates there is huge risk of gap up or downs. You can bet big money is monitoring this closely so we will likely see it in the charts before any formal update.

[Maxtrade]

Thanks for the analysis JTH.

Still learning all this I guess, but I thought from looking at the charts it looks like there has been steadily weekly higher low's, and weekly higher high's since the end of May.

In regards to your comment...

Weekly Chart: A2M Weekly.jpg
- We are still in a weekly downtrend (i.e. no weekly higher low and then higher high set) ??

Can you explain how you see that on the chart as you are indicating. In my ignorance it looks like each week lately the SP has been having a higher low than the low of the previous week, and a higher high reached than the high of the previous week.

So isn't that then showing that the weekly trend has been increasing over the past ~ 5weeks ??



Thanks in advance

Let's apply some technical analysis and see where we are at, what to be looking for and what the most likely scenarios are.

Monthly Chart: Attachment 12665
- Strong monthly downtrend
- Drop of ~75% from the peak
- No monthly low has yet been set (i.e. no monthly candle breaking above the peak of the previous one)
- Volume has climaxed the last two months, indicating large distribution
- Monthly RSI touched oversold

We can expect at some point that the monthly low will be set (monthly candle breaking above the peak of the previous one). We are setting up for this well at the end of this month, however ATM is a strong bear so we should not be trying to preempt this. If it does happen, after a drop of this size the most likely scenario is a monthly lower high. It would still be a potential monthly bear flag if it topped at anything below AU$10.50, so there's a huge range it can run and still be long term bearish. This must be kept in the back of your mind.

Weekly Chart: Attachment 12666
- We are still in a weekly downtrend (i.e. no weekly higher low and then higher high set)
- Weekly RSI has been massively oversold
- We are still below the weekly 12EMA (bearish)

This is the most important chart if you're looking for longer term entries. Based on the monthly chart, we know to be looking for that monthly bounce (to form a monthly lower high) at some point. For this to happen and have any follow through we ideally need to see the weekly trend change happen. At around current prices (AU$6.35) we are still a potentially weekly bear flag, so this doesn't present a good opportunity for entry at current levels. The bounce on weekly means little to me until we get that weekly trend change.

There are three scenarios to look for:

1. We set a weekly lower high at current prices and drop back and through previous lows to created another weekly bear flag (this has happened every other time. Traders will be looking for shorts around current levels (based on shorter timeframe charts) for this scenario to play out.

2. We set a weekly lower high at current levels, drop back down towards previous lows, however manage to set a weekly lower high, giving potential for a weekly trend change. The odds of this are significantly reduced if the weekly bounce tops in bear flag territory. In terms of actionable information, one looks to purchase on that weekly higher low and sets a stop below the previous low. This creates the ideal risk/reward position.

3. We rally higher ($AU6.85+) and then pull back to form that weekly higher low. If we rally to that level then we know odds are on to set a weekly higher low. So again, you are looking to buy the weekly higher low with a stop below. Near maximum potential reward, minimum potential risk.

Buying this weekly bounce right now for the longer term is a losing strategy. If you want evidence just look at all of the previous bounces.

Daily Chart: Attachment 12667
- We are in a daily uptrend (higher highs, higher lows). Remember that this means nothing in the big picture.
- We are in an uptrending channel
- We have resistance at AU$6.47 from a previous high. We should expect strong resistance in this area as it coincides with the top of the uptrending channel. Shorts will be looking to short this.
- We have a gap to fill around AU$6.85-7.00. Again if this does fill, expect heavy shorting to set that weekly lower high

At this point the daily chart is not useful for those looking to establish longer term positions. Shorter term traders will be looking for quick scalps if we get the gap fill, but at this point the shorters will be getting interested, with a weekly lower high being confirmed if we ideally get a daily down trend. There is heaps of trading opportunity on the daily and lower timeframe charts.

TLDR: unless you are a short term trader, look for that weekly higher low to be set before potential entry. If we the weekly higher low is set at the current level, be aware that there is a good chance we can drop to even lower lows. There's also risk that that if we get a weekly trend change, we may just form a monthly bear flag (fundamentals should determine this). Set yourself up in good risk/reward positions and be okay stopping out if it doesn't go your away.

I should also note that any entry comes with great risk due to fundamentals. Until the company provides further trading and strategy updates there is huge risk of gap up or downs. You can bet big money is monitoring this closely so we will likely see it in the charts before any formal update.

Happy to answer any questions or expand on concepts.

[JohnnyTheHorse]

Thanks for the analysis JTH.

Still learning all this I guess, but I thought from looking at the charts it looks like there has been steadily weekly higher low's, and weekly higher high's since the end of May.

In regards to your comment...

Weekly Chart: A2M Weekly.jpg
- We are still in a weekly downtrend (i.e. no weekly higher low and then higher high set) ??

Can you explain how you see that on the chart as you are indicating. In my ignorance it looks like each week lately the SP has been having a higher low than the low of the previous week, and a higher high reached than the high of the previous week.

So isn't that then showing that the weekly trend has been increasing over the past ~ 5weeks ??



Thanks in advance

A good question Maxtrade. In the case of an uptrend, this can be defined as successively higher peaks and troughs (high lower, then higher highs). We haven't yet had a trough. To get a trough (higher low) we need to break down below the low of the previous weekly candle (which would currently mean breaking ~AU$5.90. After that, we would need to break through the previous weekly candle high to confirm the trend change. My rough drawing on that weekly chart shows what a confirmed trend change would look like. A trend change is far more significant than the price just going upwards. By holding the trough it gives a chance to prove that the balance has tilted to one side. Otherwise it would just be another relief rally in a weekly downtrend (as evidenced all the other times).

[aperitif]

"Trading is the ability to foretell what is going to happen tomorrow, next week, next month and next year. And to have the ability afterwards to explain why it didn't happen."