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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Last week it was sell, sell, sell, this weekend it is rain, rain, rain. We are away for the long weekend and it hasn’t stopped raining – the kids are sleeping so perfect time to go through the shares for the week. The world markets and the Australian market showed mixed results last week, with the overall trend being bearish. The Australian market finished the week marginally lower as it managed to recover some of the losses on Friday.

We are now approaching the March low again. If the low is taken out it means we are yet to see the end of the last 53 week cycle and we should see more bearish behaviour over the next couple of weeks.

As mentioned last week we sold NAB, TSE and WBC. TSE was almost at break even and the other two incurred just over 7% loss for both. Looking ahead for the next couple of years, I expect the Australian market to finally show some direction again and rise steadily.

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Well looks I was right (and wrong) about the market. Look back to the Update 26, where I mention we will have a major low between February and middle of May. We are currently on track to the low for the 53 week cycle in the XJO. Most times it retraces at least 38%, which would mean another 150 points or more. In Update 34 I was hoping we had seen the low already in February, but I was wrong.

Thank you Mr Rudd, for the higher taxing of the mining companies, which send the miners sharply lower. Thank you fat finger, for causing a rollercoaster ride in the markets this week, sending the Dow to its biggest point lost in history. And finally thank you Greece  for starting the whole mess.

It always amazes me how this all comes together at the end of a bigger cycle. As you can imagine the portfolio took a big hit last week and we got stopped out of three positions. They were STO (Santos Limited), MQG (Macquarie Group Limited) and DJS (David Jones Ltd). We further sold half of the holding in CPU (Computershare Ltd) and our position in ORG (Origin Energy Ltd). I missed to mention this last week, Origin was actually already a sell the week before. So looking at the transactions for last week, we have:

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Happy Easter everybody! Be ready for a big move in the market over the next couple of weeks. Last week was one trading day shorter than a normal trading week but I don’t think this alone explains that the XJO had a weekly trading range of only 53 points, which is just about over 1% of its value. This is by far the shortest range in a while and is usually followed by a bigger move in market.

Last week we were adding 3 more positions to our portfolio. My favourite PDN (Paladin Energy Ltd) ended up to be a nice littler earner already with a rise of just over 8%. The other buys were WAN (West Australian Newspaper), which moved up slightly and WPL (Woodside Petroleum Ltd), which ended the week marginally lower.

The transactions for last week were:

29th March: Buy 2577 PDN at 3.88
29th March: Buy 1282 WAN at 7.80
29th March: Buy 213 WPL at 47.01

Obviously the new positions lowered the return of the open positions to 11.26%. I have decided to create a separate page on the blog where I list all the closed positions including the profit/loss of each transaction. I wanted to this over the Easter long weekend but the whole family came down with a virus and I took some much needed timeout from the computer.

Looking ahead to next week, I could find one potential stock which meets the buying criteria. SGM (Sims Metal Management Ltd) needs to go above 22.83 for the monthly swing to turn up and all other rules are currently met. Looking at the recent buys, I still have NAB, PDN, STO, TTS, WAN and WPL meeting all the rules according to the HSC. As always, please compare this with your own analysis before you decide to buy or sell a stock.

The portfolio as of 1st April is:

The market is still edging up cautiously and we are only 44 points away from the January high. The percentage gain for the portfolio is slightly down compared to last week, mainly due to our new additions STO (Santos Limited) and TTS (Tatts Group). Both were up on their buy price (STO) 4%, but still below the average gain of our open positions.

On Monday I’ll be adding three more positions to the portfolio. WPL (Woodside Petroleum), WAN (Western Australia Newspaper) and PDN (Paladin Energy Ltd) are fulfilling the buy criteria according to the HSC. At this point I would like to urge anyone, not to buy or sell based on what I am doing with the portfolio. I simply apply a set of rules that I learned doing the Home Study Course (HSC) and write what I see the indicators are. I might interpret them differently then you would. Always do your own analysis on a stock. If your results differ from mine, please let me know.

Back to the transactions for last week:

22th March: Buy 4115 TTS at 2.43
22th March: Buy 705 STO at 14.19

That’s all from me for this week. It’s my wife’s birthday this weekend and time for me to spend time with my family.

The portfolio as of 26th March is: Read more…