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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Let’s start with the good news first. I can see more and more stocks being in a confirmed downtrend according to the Home Study Course rules, which means once the market turns up again, there will be plenty of buying opportunities.

What a week, as I was reading in one article – it was a blood bath. I wrote last week that we will see either big falls or a big gains after the US debt ceiling vote. Although many private investors would have thought otherwise (after the vote), markets had their biggest one day fall since the beginning of the global financial crisis and there are doomsayers saying this one will be worse than the last time. Let’s wait and see and get everything into perspective. The overseas markets had a fantastic run since June last year (not necessarily the Australian market though). And so far we have seen just over 38% retracement of the rise for the Dow Jones index. This is a very normal retracement for a cycle and we need to wait and see how much further it will fall.

So much to the global markets, now we have a look how this affected our portfolio. As you can imagine with a number of positions already in the red, this week triggered a number of stops. We got stopped out of AGK (AGL Limited), OST (OneSteel Ltd), SGM (Sims Metal Management) and WOW (Woolworths Ltd). And if the bears continue to dominate over the next couple of weeks we will close further positions. I also mentioned last week, that we had 4 stocks fulfilling the buy criteria. I was looking at them again on Monday morning and was thinking that it is not worth the gamble with the uncertainty of the US debt crisis. For the record all buys would have resulted in a loss with the stop being hit this week.

Not surprisingly I didn’t identify any stocks meeting the buy criteria this week and I noticed ORI (Orica Ltd) having two closes below the uptrend band.

The transactions for last week were:

5th August: Sell 682 AGK @ 13.42 for a loss of 8.45%
5th August: Sell 4975 OST @1.71 for a loss of 15%
5th August: Sell 526 SGM @ 16.17 for a loss of 15%
5th August: Sell 368 WOW @ 25.41 for a loss of 6.37%

On a private note, we are going on a Europe trip for until beginning of October. I will do my best to continue regular updates to the blog but I might miss a week or have the update delayed.

The portfolio as of 5th August is:

The portfolio of our current positions is back in positive territory again (at least for now). Although there are still 5 out of 7 positions in the red we are up by just under 1%. The market took a breather from the recent losses and finished the week up compared to the previous week. We are now outside of the orb period of the 53 week cycle in the XAO and should shortly see the recovery of the market. Mind you the market is still very sensitive towards negative news and we could easily see another steep decline before it goes up again.

There were no buy or sell transactions for the portfolio this week and the same is true for the week coming up. None of the stocks currently in the portfolio are giving a sell signal and we are at least two weeks away before adding another position.

Looking at the other stocks which form the ASX 100, I have following fulfilling the sell criteria according to my analysis: AMC (Amcor), CCL (Coca-Cola Amatil), CEY (Centennial Coal) and ORI (Orica Ltd). Again this is my application of the HSC rules, before you make any buying or selling decisions always conduct your own analysis.

The portfolio as of 28th May is:

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Another week of heavy losses with many stops being activated. The XJO has now retraced by about 45% of the recent rise, which started in March 2009. And it looks like the market will at least take a breather on Monday with the US markets pointing higher on Friday. As mentioned in an earlier entry, this is quite normal at the end of a bigger cycle where you expect the market to retrace between 38% and 62%.

What looked like a quiet week in regards of selling and buying for the portfolio ended up to be a hectic week with a total of 4 stops being activated. We have been stopped out of WPL (Woodside Petroleum Ltd), WAN (West Australia Newspaper), SGM (Sims Metal Management) and NAB (National Australia Bank). There was also NWS (News Corporation), where we sold the remaining half on Monday as the stock had two closes below the trend band. Sorry it slipped through when I did the update last week, but when I looked at the chart again on Sunday I realised  we had two closes below the trend band.

The transactions for last week were:

17th May: Sell 304 NWS @ 18.50 for a total profit of 11.84%
21th May: Sell 373 NAB @ 23.93 for a total loss of 10.64%
21th May: Sell 443 SGM @ 19.17 for a total loss of 14.98%
21th May: Sell 1282 WAN @ 6.77 for a total loss of 13.02%
21th May: Sell 213 WPL @ 41.09 for a total loss of 12.59%

This reduces the portfolio size to 7 stocks with one being in profit and the others currently in the red. It also impacted the return on the closed positions which came down to 16.94%, whilst the current open positions sit at -2.55%. Still not bad considering that the market should turn around in the near future. There will be plenty of opportunities to buy and make good profits.

There are no buys or sells for next week however I have a couple of stocks on the sell watch list as they had one close below the trend band this week. They are: AMC, CCL, CEY, ORI and WDC.

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I am excited. Many of you will wonder why as the market just dropped by over 5% this week and we are almost back to our November 09 low. I am excited for two reasons:

Firstly, Any market that goes down, will go up again. Every week I see more stocks that are in a confirmed downtrend. When the market is ready to go up again we will have many opportunities to buy back into it.

Secondly, I have just ordered a new trading course, which will help me moving from a weekend trader into full-time trading.

I will share more about the above in upcoming blog posts, I would like to create a trading journal here to share my experience and to keep me on my toes.

Now back to the blog portfolio, we didn’t have any sells or buys last week hence the portfolio remains unchanged (except from a drop in profit obviously). Next week there is only one Sell for the portfolio, which is PDN (Paladin Energy Ltd). This is an interesting one as it has been a sale back in October 09 already. This is were the trader’s mind comes into play and sometimes makes you not too see things that are right in front of you. Again I will elaborate on this in a separate post.

Following other stocks are giving sell signals this week (some of them have been sells before and resumed their uptrend): Read more…