The Home Trading Blog

I am up to the portfolio update 100 and it is good to see your comments indicating that you appreciated what I am doing. I am hopeful the markets do their bit to celebrate this post and continue their way up. After having a really good week the week before last, the Australian share market continued to advance, although by a much smaller level. This led to many more buying opportunities for next week and could mean some healthy profits in the near future. If the indicators are wrong however it will mean that the portfolio goes into negative territory for the first time.

Before I went away I mentioned that I would like to change the way I present the portfolio. Rather than always buying 10k worth of shares, I will use a percentage of the capital I have available for any purchases. This will give a better picture about performance as any profits are re-invested. Unfortunately having just returned from holidays I have been a bit busy this week and will set this up in the next two weeks. So for now any news buys will still be added to the existing portfolio. I will however transfer them to the new one once everything is set up.

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We are back from our extended holiday to Europe and had a fantastic time. The way it looks I didn’t miss much in the market and we picked the perfect time coming back. Looking ahead I can see many buying opportunities. Let’s just hope the market has found its bottom. Whilst overseas I occasional looked at the different indexes, one day 2-3% up and a few days later 2-4% down. Crazy market conditions. The German and the Australian index haven’t made a new low for some weeks now making me hopeful that we have seen the bottom.

Looking through the charts this weekend I could see many bullish bars indicating the same. And for the first time in months there are a number of stocks ticking all the boxes (according to the HSC) for a buy. If the upcoming week remains positive there will be plenty more joining in. Whilst the market is volatile though, it might be worth to look at a slightly different strategy to determine the stop loss. David teaches to never risk more than 15% on any given (HSC) trade and if the turning point is closer, use the turning point +1% as the stop loss. There is nothing wrong with this approach, especially if you are just starting out.

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I was surprised this week to see the blog portfolio profit only marginally lower (7.49 %) compared to previous week (7.52 %). Looking at the XJO (Aussie 200 index) and at my charts for the week I would have expected a bigger drop. The Australian market lost further ground and finished the week more than 1 % lower. Comparing this with some of the major markets overseas (e.g. US and Germany) you will see that the German and US markets have passed the April 2010 high already, whilst the Australian market is still more almost 400 points short and has some catching up to do.

I mentioned last week that I will sell DJS (David Jones) and JBH (JB Hi-Fi) and one of my readers pointed out that DJS should have been sold already on the 22^nd October. I have missed the swing low that was created by an outside bar on the 8^th October. I have adjusted my transactions accordingly and turned a 1.5 % loss (selling it last Monday) into a 7.26 % profit (selling it on the 22^nd October).

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The Australian market finished its second consecutive week lower, led again by losses in the big miners. The financials are still relatively stable and not affected yet by the Greece crisis that rocks Europe. However there are a lot of signs that we have not seen the end of this and we could see another substantial drop over the coming weeks.

In regards to the blog portfolio I keep sticking to the rules, however when it comes to my personal investments, I am putting tight stops in place to protect my recent profits. Last week we had three transactions, two buys (MQG – Macquarie Group Limited and WDC – Westfield Group) and one sell with AXA (AXA Asia Pacific Holdings). This closed our AXA position after we have previously sold half of the holding. Overall it returned 46% for a stock that we held 8 months – not bad at all.

The transactions in detail:

27th April: Buy 810 WDC at 12.35
27th April: Buy 204 MQG at 49.10
27th April: Sell 1168 AXA at 6.18

For the week ahead I identified CPU (Computershare Ltd) as showing weakness and I will sell half of the current holding. I didn’t find any other stocks that met the buy or sell indicators for the week. From the recent buys I still have BLD (Boral Limited), NAB (National Australia Bank) and WDC tick all the boxes.

As always remember this is based on my own research applying the rules of the HSC. Before you buy or sell a stock, always do your own research.

The portfolio as of 30th April is: Read more…

Whilst the Dow and some European indexes finished the week higher, the Australian market finished the week more than 2% lower than the week before, with the miners and energy sector leading the market down. The blog portfolio followed this trend with almost half of our open positions now in the red. The biggest loser again was PDN (Paladin Energy), and the best performing stock was NWS (News Corp Limited).

Whilst I went through the charts today I noticed that almost half of the stocks that I am watching have been going sideways for 3 – 6 months. This is a sign of uncertainty in the market and the recent performance of the portfolio mirrors this. One good example is DXS (Dexus Property Group), which is currently up 8.29%, which is the same than we had 4 months ago in December 09. If you own a stock that goes sideways like this for a number of months, it is a good idea thinking about selling it and invest the money in a stock that has more potential.

Back to the portfolio, we have added another position with BLD (Boral Limited) on Monday. The transaction was:

19th April: Buy 1739 BLD at 5.75

Looking forward to next week I have identified two more stocks that meet the buying criteria according to my studies of the HSC rules. They are WDC (Westfield Group) and MQG (Macquarie Group Limited). TCL is still on my watch list, with the monthly swing being down.

I will exit the position on AXA (AXA Pacific Holdings Ltd) as it is now in a confirmed downtrend. Further stocks that I have identified as meeting the Sell criteria are MAP (MAP Group) and BEN (Bendigo and Adelaide Bank Ltd).

As always keep in mind that this is based on my own research and how I apply the rules of the HSC. Before making any buying or selling decisions of your own, always study the stock yourself.

The portfolio as of 23rd of April is:

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The Australian market finished the week slightly up again with not much movement during the week. We sold another two positions and are down to 8 different stocks in the portfolio. In the last blog update I forgot to mention some profit taking for AXA as the stock showed a sign of weakness in the week before.

With this we had a busy start to Monday, selling QAN (Qantas Airways), TOL (Toll Holdings) and half of AXA. The good news is we will have our first buys for quite some time on Monday.

But first the transactions for last week:

8^th March: Sell 2415 QAN at 2.82 for a total profit of 31.15%
8^th March: Sell 826 TOL at 7.21 for a total profit of 26.53%
8^th March: Sell 1168 AXA at 6.34 for an initial profit of 48.13%

Not a bad result thus far. As mentioned before we will be buying NAB (National Australia Bank) and DJS (David Jones Ltd) on Monday.

A quick update on my intraday trading: It has been quite a frustrating week for me, not in regards of results, more in regards of setting up the right environment and getting a decent amount of intraday history to start backtesting effectively. On top of this one of my computers (the one that I use for trading) decided to only boot occasionally on Friday. And then when you think you made it showing the dreaded blue screen of death. Thank god for a good backup system.

As you can see there is some good material for upcoming posts, just need to find a bit more time in the day.

Now back to the portfolio, as of 12^th March it is as follows: Read more…