The Home Trading Blog

Welcome to another one of my blog updates. It is getting more challenging for me to find the time going through the ASX 100 stocks and to update the portfolio over the weekend. As many of you are aware I have started trading Forex on an intraday basis during the week. This for me is enough looking at charts and I like to spend the weekends with my young family.

I have decided to stop the weekend HSC updates and start posting charts of some of my Forex trades I have taken during the week. I think this blog showed that the method taught by the Home Study Course is indeed profitable. However in times of sideways moving markets it will give more entries (than in an upward trending market) that result in a loss. Personally I believe in times like this it is best to sit on the sidelines, use smaller position sizes or look for different charting techniques and shorter timeframes. The challenge here is that you will miss the point when the market starts trending up again.

I will however continue to report on the current positions in the portfolio. As I am using NinjaTrader for my intraday charting I have also decided not to renew my Market Analyst subscription and have to base my exit criteria on trendlines rather than the trendband. I have found that when it comes to intraday charts NinjaTrader is much more responsive and reliable than Market Analyst. The only downside is that it is lacking some of the Home Study Course tools like trendbands or Gann swing charts.

There are a number of stocks that I have added to the portfolio since the last update. They are ANZ, BOQ, ORI, WES and WPL. I also closed the position in TEL as it had two closes below the uptrend band. The transactions were:

17th October: Buy 472 ANZ at 21.20
17th October: Buy 1250 BOQ at 8.00
17th October: Buy 401 ORI at 24.93
17th October: Buy 313 WES at 32.00
17th October: Buy 281 WPL at 35.65
28th October: Sell 5848 TEL at 2.00 for a profit of 16%

Before I finish this post a big thank you to my readers out there for your support and your comments. As I said I will continue the blog, just in a different format.

This leaves the portfolio as follows:

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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The blog portfolio is edging higher and following the trend of the Australian 200 share index. The index is almost back at its last major high from February. This is in line with some of the major indexes worldwide, however the Aussie is still lagging behind unlike the Aussie dollar which is recording one major high after another. Whilst the strong Aussie dollar is fantastic when you are travelling abroad it is not good news for many of your corporations and this is holding up the market.

Looking at the top 100 stocks in Australia, I have identified a number of buys for the week and also saw many stocks that may fulfil the buy criteria (according to the HSC) in the next couple of weeks. There were no sell signals that I noticed. The new buys are QBE (QBE Insurance Group Ltd) and AMP (AMP Ltd), which I mentioned on my watch list last week. HVN (Harvey Norman), BOQ (Bank of Queensland) and TSE (Transfield Services) are stocks on my watch list for this week. They have the potential of becoming a buy during the week if the monthly swing turns up. Read more…

Back again from our short break and it is good to see that the stock market didn’t do anything silly whilst I was away. The Australian market finished the week higher than two weeks ago when I wrote the last post. As I mentioned there it is still not performing as well as some of its global counterparts like the US or German stock market. Let’s hope we are getting a strong finish to year and bring the portfolio back up to a double digit profit.

We didn’t have any stops triggered whilst I was on the road and I haven’t checked if there were any new buys that we missed last week. However I have added to my position in PDN (Paladin Energy Ltd) on Monday. PDN is more than 15% percent in profit and the last swing down was less than 50% of the previous swing showing strength.

There will be some movement next week as I have identified one new buy. SGM (Sims Metal Management Limited) fulfils all the buy rules according to the HSC and I will add it to the portfolio. There are also a number of stocks that were a buy previously and either still are a buy or are a buy again. They are BOQ (below 12.06), MAP (below 3.12) and NWS.

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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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Last week we saw Australian shares posted their worst week in three months. We saw a similar picture in the major international markets and our blog portfolio followed the downward trend as well. With ILU (Iluka Resources) and PDN (Paladin Energy) we still had some strong performers helping to limit the overall loss. The current positions are still up by 7.52%.

As mentioned last week we have added CPU (Computershare Ltd) and MQG (Maquarie Group Limited) to bring the total number of positions up to 20 again. Both finished the week lower though with CPU retreating 6.29%. Next week we’ll be selling JBH (JB Hi-Fi) and DJS (David Jones Ltd) as both had two closes below their uptrend band.

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