RYM - Ryman Healthcare

[Joshuatree]

Yeah pros and cons Forest. I like the fact they do alot of my paperwork for me amongst other things like this placement. Last good placement was APA on ASX at re A$2.85. I paid brokerage of 1% plus $7.50 trade charge on RYM SPP. Sometimes i demand less brokerage on big deals and get it. They have diff levels too. Im what you call an Habitual Investor. Sophisticated Inv get offered the best deals but you have to have a few mill or so to get that, not sure re details there. cheers.

[forest]

Thanks Joshuatree for the info, forest

[Hoop]

Craigs hit the phones after the market closed yesterday - took the opportunity to top up my holding.

Some happy Craig's clients then. Maybe its time for me to switch brokers ? Forsyth Barr are .... I'd better not say it.
The rest of us who want to top up have to pay more :-(

$2.58 was the price. Institutions got the bulk and us lucky Craigs clients the rest.

Now is the time for the "lucky" few to be careful.

After a long uptrend 28 months that included a technical weakness starting mid June 2010 lasting 4 months, we are experiencing another weakness now. The primary uptrend survived the June-October 2010 technical weakness which had better fundamentals than now. This latest weakness could just be another breather in RYM bull cycle....atm it is too early to tell. To be careful the new entrants should have stop/loss point in place.

Not to offend anyone....when smart money exits dumb money fills the void.

I personally find this period of weakness when most of the technical indicators fire sell signals a time not to buy..granted everyone has a different trading methods.

The chart below shows the gap up and gap down area...imagine Tainui selling exactly at that point spooky ..huh? Drawing S&R lines through gaps makes those lines very powerful therefore that 2.70 resistance level is very powerful (note 2.70 S&R line is undistinguishable on a line chart). Trading above 2.70 would therefore be a vote of confidence. A drop below 2.62 would confirm a downtrend.

[percy]

Hoop,
thank you for your chart and sage advice.

[CJ]

Hoop - how do you factor in large sales like this into TA. Do you try to confirm whether it is just short term weakness as the overhang slowly works its way through or is that ignored in TA?

Also - how do you define smart money. I assume the funds that bought of Tainui would also be considered 'smart money'

[Hoop]

Hoop - how do you factor in large sales like this into TA. Do you try to confirm whether it is just short term weakness as the overhang slowly works its way through or is that ignored in TA?
Also - how do you define smart money. I assume the funds that bought of Tainui would also be considered 'smart money'

how do you factor in large sales like this into TA CJ a good question . Lets go extreme with unusual events. An argument popped up when the flash crash occurred over a computer "fat finger" glitch ..do you factor in these events?? some TA experts said yes some said no.....in hindsight when the markets fell and retested this so-called flash crash support points it was found to be valid support points.....so personally I would say that nothing should be ignored. TA after all is objective analysis of the "now" and is recorded to provide that history.

TA objectivity shows a big player (Tainui) sold out at a price below the market price causing the OBV to drop..The OBV fall is recorded as a chart event ...that is all!!.

The OBV indicator can display some behaviour of which way a share price may go..however it is only one indicator ...as history has it RYM's OBV has a very long term divergence with its share price...therefore the smart money exits may seem to be not that smart in hindsight. With this type of history I would not get too hung up about this sudden drop...but remember it was Phaedrus's favourite indicator...so OBV should be treated with respect and drops should be treated with caution.

Do you try to confirm whether it is just short term weakness as the overhang slowly works its way through or is that ignored in TA? All emotion assumptions (subjective) should be ignored in analysing TA. TA will tell you objectively with time if this overhang is working its way out of the market and if this is a short term weakness. TA will confirm one way or the other with time.

how do you define smart money. I assume the funds that bought of Tainui would also be considered 'smart money' The presumption is that big players move markets there is another assumption that Mr Market knows more than you. When Mr Market shows a sudden OBV drop it is telling you a big player has cash up at a price less than the market price for some reason and there are not enough investors to buy that holding at market price. Mr Market objectively reasons this as a negative therefore traders nicknamed it as smart money.
investors that bought up Tainui holdings use dumb money.....don't get emotional over this smart/dumb terminolgy...It is a type of Yin Yang effect ... like an equation.. one side balancing the other side.

[Sauce]

Hoop - how do you factor in large sales like this into TA. Do you try to confirm whether it is just short term weakness as the overhang slowly works its way through or is that ignored in TA?

Also - how do you define smart money. I assume the funds that bought of Tainui would also be considered 'smart money'

CJ you read my mind. I would to hear your thoughts on this also Hoop. I have no undestanding of TA so please excuse my ignorance. I noticed the RYM chart looked suspiciously like it was forming the 'double top' I have seen Phaedrus and others refer to as bearish many times.

Fundamentally, RYM healthcare is looking better than ever (Albeit coming off a larger base so future returns will be lower than last decade unless Australia is as successful as NZ - but dominant advantages are much more entrenched - hence they have never been in a stronger position).

So it will be fascinating to see how things pan out over the next year or two then.

Regards,

Sauce

[Sauce]

Woops didn't realise you had replied already.
Cheers
Sauce

[Sauce]

I have to say it all sounds horribly risky to me Hoop. But I have no practical knowledge of TA.

The 'business' risk with RYM at this current point in time is so low, if you get stopped out of RYM based on Mr Market's reaction to short term price and volume changes (isn't TA at least somewhat self fulfilling if a lot of market participants are using it to make decisions?), could you not easily end up on the wrong side of the trade as the underlying business value keeps increasing and the share price catches up?

Thanks in advance for your thoughts.

[winner69]

Good discussion

I remember the same sort of discussiona few years when AMP sold out of RBD at 60 cents odd that sent the OBV spiking down ..... now that was dumb money getting out eh