The Student Loan Ranger

Extended my position in DES after selling SEO for a big loss yesterday. The AGM wasn't very bullish so I decided to sell out. The market makers had moved in too which really annoys me. It has dropped another 7% today so glad I sold when I did. SEO will be one to watch later in the year, but for now there's way too much hype.

This is by far the worst trade I've made, and I'm glad I have learned enough now to avoid these plays in the future. There are many rules to be learned from these types of trade, and I'm glad I've learned them now rather than in a few years down the line when I'm playing with a lot more than a portion of my student loan.

I topped in DES after it dropped 4.5% yesterday. Their annual report came out today - their losses are much reduced, and they expect approval for their Falklands campaign in the near future. This is along term play that I plan to ride out until I get an absolute sell signal.

I've been having a quick scan of the markets in between monster study sessions, and for the midweek coverage I can mention a few of the stocks from this week.

For some reason, Yahoo charts are working off old data - so yet again no graphics.

British Airways is a buy on a clean break of 222

BP broke key resistance at 582 and hit 621 before settling today at 610. My initial medium target was 625.

ADM trading at 863 today, up from initial price of 814.5 and target of 850. Strong resistance at around 920. Should find support at 850.

NG is down to 695 and not looking too great.

BAE down a few ticks as it looks to steady at 465. Possible entry on a tick up off short support line from last weeks chart.

AAL continues to drop in line with predictions from April 20th.

VPC attempts consolidation but looking very average.

MGCR up a slight as it continues to defy my analysis lol.

Last weeks LSB scalp is beginning to look like a good medium/long play. Big rounded base and continual 2-3% daily gains. Watch out for a bear flag formation. I may well add this to my portfolio on strength. Price target of 23p.

Nothing else happening for me on the stocks front. I have been messing around with ProRealTime, programming some stock screeners. Mostly based on stochastics - with one "Ultra Screener", which has so far returned 1 result from every listed stock worldwide lol.

I have also started to find that UK stocks are highly unenjoyable to trade:

1. The available information on them is bad, and very expensive.
2. With the exception of BARX, there are no high-end, direct trading platforms with the kind of charts I need.
3. The manipulation in them is high.
4. The cost of trading them is high.
5. The chances of trading between 8-9am and getting a reasonable pre-move scalp are minimal.
6. The reliability of the brokers is low.
7. The volume is pathetic except for the top 5.
8. The intra-day movement is low except for extremely volatile stocks.
9. The intra-day movements more or less cease after the big boys at the brokers have made their money before the market really opens.
10. Brokers often cheat you out of money by claiming technical difficulties.
11. There is a high level of backroom dealing that the PI is not allowed to know about.
    
12. I want to start trading American stocks.
13. UK brokers are self serving
    

I conclude
I don't think it's possible to successfully, and consistently day trade in the UK unless you're spread betting on the FTSE or using CFDs. Or also unless you have over £20000, an excellent broker, and cash to burn on market data.

I think a lot of this is just the British mentality about other people being successful. Nobody really likes it, especially those who are in control of peoples' success.

The only real way to make money of the stock market, in the UK at least, seems to be via long term investments in the blue chips. Or by swing trading. I will swing.

A few longs this week as I don't have time this week to cover anything exciting. Most of these are bottom catching and sup/res plays. They are AAL, BP., BA., NG., BAY and ADM. I have covered the first 3 last week and the predictions are still in line with those. Apologies for the lack of consistency in chart formats - I keep chopping and changing.

Of these, they are all bullish predictions, with the exception of AAL, which I think will continue to drop as of last weeks prediction to a target of 3150.

BAY - British Airways
Up + Targets S=250, M= 300, L= 360

Quite a few things going for BAY at the moment. On a non-technical basis, Lufthansas good profits were taken well by the market, and the decline in the SP of airlines seems to responding a little better to oil prices. US airlines have been OK the past while too. BAY report in May, and the results are expected to be quite good.

From a technical side the downtrend is very well established and has been for well over a year now with few attempts to break out. These comments correspond with the numbers on the chart.

1. BAY has just bounced off a 52 week low - which has been very strong support and resistance going back over 5 years. This is a good sign that this may be the beginning of some consolidation at this range with a view for a reversal.

You will also notice some strong gap ups and bullish engulfing on the candlesticks, the SP has recovered 10% in the past week. During this trend there has been very little bullish movement like this.

Moving averages looking to undercut price in the next few days if continuation seen.

2. Stochastics in oversold range and signal line facing up and crossed over.

3. MACD signal line facing up, crossed over. Negative divergence on histogram and signal lines indicate possible turn around.

4. Bearish directional movement facing down, Bullish directional movement facing up. Line in the middle of the two looking to cross to confirm.

We have some excellent scope for inverse H&S formations on S, M and L terms. EG a move to resistance at 250, and a drop back to new support at 220 - then a move back is is a good short term pattern. If that were to form we would be over half way to a medium term inverse H&S. This is way too far in the future to be accurate of course. I don't have the bollingers on the chart as I don't use them as much, but BAY is also trading the bottom of the range.

On the downside, the resistance line is to be watched so we don't see a repeat of the move 5 weeks ago.

I do think that in the long term, and at this range of prices, that BAY represents a sound long term investment. Volatility in oil prices, as well as infrastructural issues such as T5 are going to affect the SP in the short term. With some good results in May we may see a confirmed pattern reversal. However, in this market, the bottom isn't always the bottom - and the top isn't always the top. I don't think we will see British Airways sub £2 again for a long time - to me this is a £3.5-£4 share.

ADM - Admiral Group
Up (Then down, then back up) + Targets M=850, L=950-1000

Another good jump off the 52 week low I spotted a few days ago at 760. Some seriously bullish movement over the past few days - on progressively lower volume however. Perhaps this is just as long term investors fill their boots on the low.

I think the momentum in the immediate short term may be out of this, I don't like the declining volume or the spinning top - this makes me believe we are still waiting for something. I think we may see a pull back to about 780, then a move past 850. The DM, MACD and Stochastic indicators are good, as are the shorter term EMAs. The Stochastic - while still OK, is bullishly reaching the oversold area - I think that could be the sign of the pullback but don't quote me on that.. or anything else on here lol.

Can't comment on sector issues or financials - as even good ones in this industry aren't being taken all that well right now. I think we have scope in this share as high as 1100 - but I would rather hold BAY ahead of this.

Retrospectively this is more of a medium/short play as there are plenty of signals there.

NG. National Grid

I've just scrapped covering this as I write - the range isn't big enough for me. Look for a break of 750 before entering. Big trend resistance which could then form a brilliant head and shoulders pattern. Some good indicators, but this one just isn't for me.

BA. looking good, the chart from last week shows the resistance it needs to break - so use that as a guideline. Technical aspects - well, the indicators, are looking very healthly. Price target in excess of 500. Very small range however, and may only represent a quick 5-7% at max. Watch a downside break for support circa 455.

BP. is consolidating between 570 and 580 at the moment. This is an entry at a clear and confirmed break of 582 for me. This should be supported in the short term at 570, however some neg divergence on the MACD might test this theory. I still think that entry to BP. is at long support of 510, or a break of 580 with range trading in accordance with that. Short if this drops below 570 - but be careful for the old bounce bounce break.

We now also have the support of the 200 day EMA for long term. Direction movement says bear up, bull down so we might see a pullback, but within the consolidation range.

Some speculative plays on FDI at all time highs and good diamond mine chat. EEN also looking to test resistance at highs of 370.

Like I said, not covering much this week - too busy to watch the movements.

From the portfolio, SEO issue a trading statement at the AGM on Monday. I'm really hoping for some positivity here, as my money has been tied up in an awful decision I made back at the start of March. I would love to see 1.3p for some profit and a quick exit - but Stanelco have a history for dissapointment so more realistically I'm looking to cut losses at 1.05p.

DES results and statement out next week at some point. My holding is £2400 in these, and I will hold into the summer holidays with these I think.

Not a great deal of excitement in a week where I have increased my small position six-fold to £2400 in DES in the lead up to some big news in the coming weeks, and made a very quick scalp in LSB. I won't be looking for any swing positions or short term moves as I have some important exams coming up in the next 3 weeks. I felt a long position in DES through the exams would suit me better, don't need to be spending half an hour each night looking at charts when I could better use it for dynamics and thermofluids revision.

There are a lot of numbers being banded about for medium/short term DES - most commonly in the 120-140p zone. More realistically we're looking to break a pound on news and a 15% move on that with anything decent - followed by a long and continued upward trend. DES is a terrific long term play given their position in the Falklands and the current oil price. I will probably just ride this out long if it forms a good uptrend. An RNS should be expected within 2 weeks - this Monday and Thursday are hotly tipped.

For some reason my internet is horrifically slow on a Saturday morning so I'm having trouble getting prices and charts for last weeks Crystal Balling. I think these figures are correct as of Thursday night.

BP is one of the more interesting ones - broke the resistance, only for the oil price to drop overnight. It dropped 10p, but tried to recover on Friday. With the Grangemouth strikes and shocking panic buying at the petrol stations I expect BP to break out. If it breaks out, wait for a bullish up day for confirmation - as if you had bought on the break this time you would be losing out.

I'm glad I'm out of my SHI as it dropped to 780. MGCR is down 5% on an initial prediction of down. VPC still looking OK at 717, up 9%. PMO continues to walk on the price ceiling, up 8.5% - looking for a pull back. My new reversal position in ADM backfired by 3.5%, however AZN second phase is in line to the meagre tune of 2.34%

A bad week for my call on BKG, down nearly 6% by Thursday. SOLA dropped a bit this week, this is looking like a good stock to trade if you get it right. AAL in line with prediction just a tiny 1% and BAE up 4.2%

Bottom-catcher tips in ADM, NG. and one I noticed on Wednesday night - BAY, are looking strong - and I think all will feature on next weeks list. All have come off 52 week lows, with some of those figures historical support as far back as early 2004. BAY at sub 222 looks excellent long term. ADM looks good short with NG. looking good for either.

I won't be in the game so much this coming week - so the Crystal Balling will feature some medium/long plays with one or two that I think look decent shorter. Already on the list are ADM, NG., BAY - I think I will continue to cover BP., AAL and BAE into next week too.

I will upload some charts here when my internet is working better. Gym time.

BP Seems to have broken through the resistance quite strongly today, closing at 583.5p. Stochastics still +80 and a bit messy, but this stock looks good. If this stock ticks up at all tomorrow that would be my entry signal.

Short term price target 604 with scope to 625.


BAE Systems formed some good horizontal support these last few days and jumped up 2.89% on good volume today back into the trend line. Good stochastics signal, MACD showing early signs of reversal. This needs to get some breathing space from 465.

Short term price target is red mid-line depending on strength to upper trend line.


A lot of resistance at 234.5 for MGCR. This has started to pull back off that. Bearish MACD, low volume, stochastics looking very bad in the short term. Starting to form a good upward channel in the medium > long term.

Keep an eye on the stochastics for an early signal here, I think this will bounce off 207:208 for another move up.


ADN slowing, but still on course for 150.

PMO testing me here which is good. Big 6% surge today, but yet again still just at the top of the trend line. This is up long, but I wouldn't be getting in - either wait for a pullback or once it's cleared the trend line.

LMI really trying hard now to break the 3315 zone. Big big spinning top today. Wait for a break out of the short channel of 3170-3315 before making a decision on the direction here.

BKG started to attempt a slip off the trend line. Down a few percent over the past few days. Doji, if it's up tomorrow that's good, if it's down over 1.5% my target is 885.

Bearish few days for SHI - I'm out of my holding for a small profit. Still a drop to the lower trend line which is holding strong. Looking for a bounce and a break out over 800 for entry signal.

VPC up 8% today on high volume to smash resistance at 720. Short term price target of 800 looking very likely by the end of the week.



Watching ADM, NG. and PET for some reversal signals. ADM the most likely, lows on NG. and PET and soem double bottom action - but not good for TA as it stands. NG. entry on move over 697, PET on a clear bounce off 90, ADM on clear bounce of lows at around 733.

DES representing an excellent long term play with entry under 88p, as are the other FI oilies RKH, BOR and FOGL. DES and RKH my preffered of the 4.

A rant on my broker - iii.co.uk

Spotted a good quick trade opportunity on LSB this afternoon and got in for 13.5p at about 15:30, by 16:00 the stock was trading at 18p. The stock dropped a little bit to 16.5p - with L2 market depth (from iii) showing buyers still outnumbering sellers by about 3:1.

I clicked to sell on iii, and then it just said no. It kept saying there was some kind of issue about an open window preventing me from selling. I had no choice but to put it through as a negotiated trade. 20 minutes later, they miraculously sold the share for 14.5p - losing me £180 in that 20 minutes because their web interface is garbage.

Why should I pay for L2 if I can't execute my trades based on that information? Why did iii block the sale? Why did it go to negotiated trade when the L2 was still strongly in favour of the sellers?

Anyway, the same thing happened when I tried to sell IEC earlier in the month. I have now applied for a brokerage account with E*Trade. III level 2 market data is the cheapest around, probably for a reason. The charting is not at all interactive and as I mentioned - what good is it if you can't use it to make a trade?

It is also very annoying to see the lack of trading platforms provided by UK stockbrokers that provide the ability to sell from within the platform, instead of via a clunky web site. Unlike the Americans, who have plenty, it seems London still wants to keep a degree of exclusivity about trading stocks.

Was up 3.75% this morning, has slumped to -3.35% at 965. At these levels this is a good buy and I expect some movement north this afternoon.

I have added 3 companies for this week, while I will continue to track the others. First up, some analysis on my choices - Anglo American (AAL), BP (BP.) and BAE Systems (BA.)


AAL - Anglo American


Quite a clean looking chart from Anglo American. SP has been strong up to resistance at 3470, where it closed on Friday. I feel we might see a drop in price in the coming few weeks. From a technical point of view, there is a high possibility of a double top having been formed last week - and a drop at the start of next week may see the SP down to support either at 2810 or as low as 2480.

AAL is set up well for trading as there are some clear points on this that are important s/r lines. First off, I'm looking for a break of the horizontal resistance at 3470. I'm also looking at a move to the upward trend line and then the top price from November.

I think AAL is in a good position to break the 3470 mark, as the stochastics are still clean enough and the MACD is looking good. I don't envisage AAL breaking this years high and the resistance at 3636 in the short-medium term.

For this week, my prediction is some a brief flight up in price, and then a drop. For those holding, my sell signals would be a long wick reaching the trend resistance and a fall back from there. Spinning tops have been good reversal signals for AAL - which may have just happened as well as a very bearish looking closing on Friday.

However, the sector and the FTSE are both very strong at the moment and could take this up through the resistance in the coming weeks. If I owned the stock, I would hold and neither sell any of my position or add to it until we see some definite movement off the resistance lines.

Buy signals off the trend line, depending on whether the SP looks likely to drop to the 2800 level.

BP. - BP


Another really clean chart here that caught my eye straight away. We've recently seen the a year low double bottom in BP and we're in a very clear sideways channel at the moment. Normally I might see this and think straight off that the resistance at 576 is not likely to be broken. However, there are a lot of positives from a TA point of view that lead me to believe that we will see some good growth up to at least 645 in the next few months.

Firstly, I believe the start of year drop was fundamentally heavily overdone. It was clear to see it coming from the staggeringly clear head and shoulders formation right after a year high double top. There is some excellent support at the 508 level which would have been a good buy a few weeks ago.

The positive divergence on the same lows from the MACD are greatly encouraging. The stochastics are still oversold - and for some reason still look bullish. The EMA golden cross is another positive that didn't occur when last it attempted the resistance at 575. Also consider the double bottom.

Then yet again we have the oil price, FTSE, and oil sector factors to include into the buyers mind - all very nice for the BP SP.

This week I will be looking for a break of 575 for a strong buy signal - followed with a 50p advance to the double top resistance at 625. If BP bounces off 575, I will look for some sideways action at 557, where I believe we might see another, and hopefully successful surge.

For me, BP is a buy at 500-515 and a break of 575 only.

BA. - BAE Systems


Bit of a hammering here the past week. Good H&S formation and a gap down drop to the range of the trend support and horizontal support lines, you could also note strong negative divergence on the MACD and a stochastics turn.

I'm looking for a bounce next week as I think we've seen the last of this drop for now. There is strong rectangular support and resistance at 450 and 513, which up until now have been the trading range.

No that the rectangular S/R channel has had a run in with the overall trend, we're looking at some decisive movement this coming week. Going back to last year we had a similar situation, where the SP was over performing, dropped into the exact same channel as now, and then made a strong push out above the upper trend line.

On the plus side the stochastics are sub 20 and slowing down a little bit, indicating it might be getting ready for a little run - but - the drop on Thursday was quite a lot out of the lower trend line - more than before.

Obviously, the key areas are the lower trend line and the upper trend line - but I believe that before the SP is near the upper trend line, it will be testing the horizontal resistance near 515.

Also, while the lows are getting higher, the highs are staying the same. This possible formation of an ascending wedge pattern has a degree of positivity about it. By the time the SP reaches the horizontal resistance, the wedge will be fully formed and we may see a good and strong breakout.

For me, as it is it's a weak buy - but I would use some very very tight stops at about 457 just in case it doesn't want to reverse. A price target of upper trend line/horizontal resistance/+9% which ever is first - but, run with the winner if the signs point towards a break out.

Now then, I will continue to watch ADN, MGCR, AZN, BG., LMI, SHI, BKG, PMO and SOLA.

MGCR I originally predicted to go down. It went up a little and has found some resistance at 235. Stochastics still OK but did tick down a little as the week closed. This has a lot going for it technically, but I do still think it will go down a little.

ADN had some fantastically bullish moves on Friday off the short term support line. My initial prediction of down, which was correct as it dropped 7.5% at max, has seen reversal and ADN is a buy this week with a target of 150p. Based on bullish engulfing, support line, and stochastics.

AZN attempted a break out but was unsuccesful. This is quite a difficult stock for me to pass judgement on, but I'm looking at moves off 2082 for the action. I think this is a sell this week.

BG., like AZN, had some attempts to make a break out based on a very good RNS. However, the following 4 days were all red and it is back to the price I stated sell. The gap is closed and I'm looking at a move off 1213 - if a bounce, then up again to the upper trend. But more likely I envisage a fall to my lower trend line to the 1135 levels.

I see negativity on PMO and LMI. LMI is potentially off my shortlist this week. PMO just seems a bit too volatile at the moment despite being involved in the oil game.

BKG looks good for a gain in price to at least the horizontal resistance between 1165 and 1180. It was a buy for me at 980 on the 17th and I believe we will see strong some blue percentage gains within a 3 week time frame. It's chart is somewhat similar to my SHI holding, which I also see finishing the week up.

As for SOLA, I see a run to 495 completely unchallenged. The solar stocks were hot in the US for a while, and I believe the UK prices lagged behind. However there were some big drops in the US markets for solar stocks last week and we might see this having a negative effect on the ReneSola SP.

In portfolio terms, SEO is looking stronger in the lead up to the AGM and trading statement - and it looks like I might actually see some profit out of this very bad purchase. My long in Desire Petroleum is paying off nicely, I feel some news on the farm-in will really make this fly. As for SHI, I've covered that enough and I'm looking for 880 to 950.

News was the killer blow for AstraZenica and BG Group - I predicted a drop in SP this week for both. AstraZenica announced some clearance of a patent issue, and also that one of their product was showing signs of blocking some cancer cells from growing. BG Group announced that it is involved in the biggest oil find in 30 years off the coast of Brazil.

AstraZenica:


AstraZenica appeared to breakout from it's current range, but corrected itself over the following days and is back in line. BG did more or less the same, and has had overall down days this week despite opening higher on most of them.

BG Group:


Aberdeen Asset Management and Morgan Crucible closed down on the week despite a strong comeback on Friday afternoon, egged on by the performance of the FTSE. ADN looks interesting yet again. It doesn't quite know what to do in this channel - I believe next week it could go up and get to the resistance at 150 again. Potentially ADN is a good swing stock like I've said before. This s/r line at 133 also represents good opportunities for quick trades.

ADN: Aberdeen Asset Management:


MGCR is in a certain uptrend now, and is looking to establish even more bullish momentum. I can't help but feel for the moment, the wind is out of the sails and it might drift a little to the new support line at about 210.

Morgan Crucible:



I removed TATE from my watchlist earlier in the week as I didn't think it was a good enough stock to hold a place there. It is up about 30p this week with strong resistance at Fridays closing price. CBRY was also removed, it had some good news, and is up about 25p on last week.

Premier Oil is up just a shade - I thought initially it might bounce back off the resistance, but it has been looking strong all week. Oil stocks are the hottest on the FTSE at the moment, and the oil price sets record highs every day - a great time to get into them on corrections in my opinion. At the start of the week, PMO gapped up, hit the resistance, and closed down with support at the gap line. I don't think PMO is a buy in the short term ¬2 weeks, as potentially there is too much downside risk compared to upside gains. I'm looking for support at 1463, 1360 and at the moving trend support line. The RSI here has signalled and is dangerously close to confirmation of overbought - but overall PMO is on the up and looks set for continued growth.

Premier Oil:


Every time I look at SOLA I'm amazed. I actually looked at this chart at the end of March, and thought - potential buy. I wasn't really clued up 100% on TA then, but looking back - what a stock! It's up 80% since then, and up 30% since I compared it with SHI for a buy. It's quite a volatile stock, it rides it's rises and it's falls well - there is a lot of money to be made, and equally, a lot of money to lose on this. I'll only supply a little bit of this chart, as my TA was deleted on it at prorealtime.

ReneSola:

BKG is a strong buy for me at the moment, nuff said

BKG:



Overall, here are my results for the past week:


I intend to keep these on my watchlist for next week, with the exception of Cadburys. I just think there is too much volatility with this stock and for me it's only a safe buy at 540 and 500.

I will have a quick look about for some new stocks for next week on Sunday night - but ideally I'm looking to keep my watchlist to about 14 stocks maximum.

2 minutes until close on an excellent day all around the FTSE from what I see. It's closed at 6052, after being given an injection of bull juice at 10 this morning. Just want to focus on 3 stocks today - ReneSola, SIG and Berkeley Group.

Think I've mentioned them all in the past 2 posts, but we've seen some good movement today. SOLA is a stock that just amazes me with it's intra-day movements. It was languishing at about 377p when I got back from college today, and literally just as I sat down, I noticed 2 green flashes and checked out the market depth. It was looking pretty strong to say the least.

Anyway, it just legged it up to yesterdays closing at 402p after being down 5% earlier in the day. It's probably about the 3rd time I've seen SOLA do this on intra-day. Here's a visual. I sat down at the box and watched it do it's thing - damning, yet again, my lack of available money.
SHI, a midweek purchase and subject of yesterdays post, broke the short term resistance from the chart I posted yesterday. It was up 2.3%, but seems to be subject to heavy support from the FTSE for it's movements, so I'm not putting its gains down to my TA at all - I just think the mood in the market was buoyant today.

There is also some strong looking indicators on the stochastics and MACD, both have taken a turn, and the stochastics are +20 in the zone so I'm feeling good about SHI for the moment.

A follow-up from yesterday on BKG. My early indications from yesterdays TA were buy at yesterdays price. The stock was up 5% today, but, like SHI, I think a lot of the movement was based on the RSI - even though it's movement outperformed most of the other stocks I was looking at.

Early indicators say run with this - it's nearly on both supports and has just seen the earliest signs of a price reversal, going by the stochastics only. I think there might still be a little bit to go on the downside, maybe by the end of Tuesday we will have a stronger indication of the reversal up to the resistance. On quick inspection there is a slight hint of negative divergence on the MACD on recent lows.

A red day across the FTSE today as yesterdays gains were wiped out. SOLA and SHI the only ones on my watchlist in the blue. I use Pro Real Time (prorealtime.com) for charting, and today noticed a new feature: auto-trend lines.

I was reading a book called the Investors Guide to Charting (not sure if it's any good yet, the guy that wrote it is not a chartist at all), so was messing around with some charts last night, but, strangely, just as I wanted to practice some new moves - this auto trend gadget popped up.

Anyway I ran it across my watch list and it's quite interesting. For the most part, my trending TA is pretty good. SHI is one exception, there was some resistance I hadn't spotted earlier:

Now, like I keep saying "tomorrow is the day", at least according to this. Today was literally on the trend line and the 9 day EMA. RSI says oversold, and it crossed the signal line this afternoon. So we could be in for a run.

My exit strategy entails the following: The resistance is at 878. I will watch for signs of weakening in the days leading up to a potential hit at 878. If I see any, I predict the SP to drop. If it still looks strong, I will hold and see if this line is broken. However I must also be exercise caution with the second angled red line on the chart.

If the SP fails at this first trend line, my loss exit will be at a break of the green support line.

This could be another failure, but I'm interested to see how this does. Potentially SHI could slump to support at 700.. or worse. A bounce off 700 is a buy signal for me. I should also add, as a postscript, that there is significant potential for a head and shoulders formation on the recent data. The volume is worryingly low on what could be the right shoulder.

Well I'm into SHI from this morning at a price of 791p. I've just uploaded this chart for a little bit of justification. I'm planning on being in this trade with an exit point of around the resistance point at 884p. My exit point will change depending on it's strength leading up to the break, we might see a false breakout like last time so I'll probably keep a close eye on it in the lead up.

I am out if this triggers a 773p stop.

I don't envisage this rally to last too long (if at all!) so hopefully it will be a nice quick and clean trade. I'm guestimating that some other stocks, mainly ADN/BKG/MGCR might be ready for entry when I close my position in SHI.



A mid-week recap on my predictions for this week (from Saturdays/Sundays post) blue is good and in line, red is bad and against my prediction.

ADN DOWN 6.94%
MGCR UP 0.11%
AZN UP 6.22% NEWS of patent resolution and cancer cure.
BG GROUP UP 6.31% NEWS of "... biggest oil find in 30 years" lol.
CBRY DOWN 0.36%
LONMIN UP 1.71%
SDR DOWN 5%

Think the rest were unsures, but have now formed enough for amateur predictions:

SOLA is mental, will continue up, potentially unchallenged until 490 - UP 25.86%!
VPC broke the resistance I was checking for and is up 6.54%, should steam on, watch for 750.
BKG's downtime looks over, I predict northwards to upper trend line, by then around 1200 before reversal back down.

PMO up 7.92% since Monday, including some seriously bullish candlesticks, however it is still below my upper trend line. 1554 and 1558 are the resistance points for Thursday and Friday. a break of these will see continued bullish movement. A bounce off these and I expect the SP to drop to support at 1460. A failure of 1460 may lead to lower support at the lower trend line. NB this stock is looking very, very strong today, and I believe is a good for tomorrow morning.

Discipline is a hard nut to crack, and it's proving a bizarre barrier for me to overcome. Maybe I'm just running to fast with this but not sure. It's starting to look like basic human psychology makes 80% of the decisions with these stocks!

I need to realise that for now, I want to be a swing investor - not a day/week trader. I can't sit all day and look at Quotestream and be like, "ok, I might sell some of this for a few quid". Or cut losses on an intra-day basis. That's not what I'm in the game for.

But I can't help it! Level 2 is a gift and a curse. It provides me with some good insight into the market, but also provides me with excuses to enter and exit trades a lot more frequently than I should.

I'm back in DES - I shouldn't have sold in the first place, even though I made a profit. And I have on order for tomorrow, another IEC ticket. I spent about an hour comparing IEC with SHI, debating which one to buy. Blatantly it should be SHI, not one reason points towards IEC - except this huge gap after the drop, and the fact they have a billion oil barrels in reserve.

The tricky part for me is this: IEC may or may not close the gap, and, like Severfield, it may take a long long time to do it - and I will know when it does. SHI provides a probable to likely 10% profit in the next 2 weeks. On paper it looks like it is beginning a new reversal in the channel and could be set for a run - it's broken the recent downward trend.

The one thing that is the most frustrating: It's always the next hour that counts. Literally, nearly all the stocks I look at will make their mind up the next day. And it could go horribly wrong. I could get into SHI for 778 tomorrow morning, but it could go down to around support at 690..

I guess what I'm doing here is talking myself out of the IEC trade and into SHI. I think I'll cancel the morning order for IEC. Instead of replacing that with one for SHI I will wait to see what it does tomorrow.

Yeah I think I'll do that..

But £100 says IEC is up over 5% tomorrow.

What is it with afternoons on the FTSE? Stocks just stop moving. It's frustrating if you're in a trade, or if you're just sitting back watching stocks. Two examples from my portfolio this morning:

DES continued it's run from Friday and ran up to 91.5. I sold out at 87.25 for about £40 after brokerage. I've bought back in at 86.5 expecting some more movement - but alas it's gone sideways for the past 3.5 hours. I'm still looking for some medium term gains (this week or next week) on DES and it still looks good. After having the capital after the sale, there wasn't anything on so a little play on DES with a view for another £40 or £50 by Friday?

IEC dropped 4.5% this morning then recovered to -2%, but, since midday again it's done nothing worth noting.

This isn't really an issue for me at the moment, as my positions are all medium - but in the future should I ever decide to trade on an intra-day basis or hold for only 1-3 days, this flat-lining could become annoying. On the upside, I guess your trading day is done and dusted by lunch time, giving you more time to do whatever people do.

Looks like a dull day across the board, the range on my watchlist is -2% > 0%. Tight.

My internet seems to be working again, about time. Anyway, some TA for next week. The following shares are on my watchlist for the next 2 weeks with the current price in brackets:

UP
Lonmin PLC (LMI 3,219p)
Tate & Lyle (TATE - 510.50p) * but not sure!

DOWN
Aberdeen Asset Management (ADN 144p) *still looking to fall to lower line from last week
AstraZenica (AZN 2,011p)
BG Group (BG- 1,220p)
Morgan Crucible (MGCR - 234.75p) *same situation as ADN
Cadbury Schweppes (CBRY 563p)

You will notice a continuation on ADN and MGCR, both have responded well to my TA from last week and are in line with my expectations. ADN is down 6% from first mention, while MGCR is down a slight from 234.75 to 231. I am 100% confident on ADN, and 85% on MGCR - there seems to be some dilly-dally between 232-228 and the stochastics have taken a slight turn.

BG Group
This is a great swing trading stock (I think..) with high gains and losses in a relatively short time frame, backed up by this strong upward trend. I'm looking for a confirmation of a reversal at the top trend line sometime early next week, I think the bullish engulfing on Friday may have provided this reversal signal already. I will short this on paper if the candlestick is backed up with a drop on Monday. The bottom trend line should provide support, and I think we're looking at a fall of around 15% from 1250 - so maybe a long buy signal at around 1100-1175 depending on the bounce off the bottom trend line.

Dumping my short position will be indicated by the first sign of negative divergence on the MACD, as well as a sub 20 RSI which looks to bottom out then make a move upwards. This is also a buy indicator for anyone going long in the trouser.

Lonmin PLC
This stock is currently positioned in an excellent sideways channel providing good rolling short and long opportunities. The support and resistance on this chart is pretty obvious, however, there is also a minor line at the 3300p mark which you could also trade off if you were lucky enough.

Obviously this will go one of 3 ways soon, and I think the first few days of next week will tell us where. It could drop from the current price like December, fall to the support at 2850p and bounce up, it could go sideways and then up, or it could continue up to the resistance at 3650p.

Divergence has been a good indicator in the past but nothing clear for this next move yet. RSI indicates a possible overbought, and therefore drop, but MACD/MA say buy. Either way don't buy it now, wait for close on Tuesday for evaluation.

The sell point is around 3600p here which is also a shorting position. The buy point/get out short price is the support at 2850. Get in and out before these prices, as apparently these represent psychological barriers in the minds of traders (their targets). Sell at 3595 then!

Tate and Lyle

OK, this one is a little trickier for me, but I'm putting it in. TATE seems to be quite indecisive about trends so forms a series of small ones. The only real identification of a trend I can find is on the 5 year chart, which says up, just not very convincingly!

Anyway, I'm not too sure what to do in a scenario like this so have speculated - and hopefully I'll learn a bit more about charts like these with this play. I'm predicting a movement up next week off the lower trend line, but I'm not 100% on this. My reasons for pessimism are that all of the moving averages have cut through the price and the MACD looks unhappy. The RSI seems to have bottomed out and may make a move though.

One thing about my drawing here - I think the lower trend line should be a little higher, if this is the case then I believe TATE has already broken the upward trend and therefore is in line for a move south.

Portfolio News

I'm still looking for get out oppor-chancities on my current holdings, as they were all bought for the wrong reason.

Stanelco sways gently in a wave of consolidation following last months tsunami. The day traders and market makers are out, and people holding this are investors, shorters, or those who nearly drowned in the waves of excitement. The trading statement and AGM take place on April 28th, where I will be waiting in the wings with a finger over the sell button. Hopefully they are either in profit or working towards it - which should kick the SP up a bit so I can reduce my losses.

Desire had a very interesting Friday afternoon, where it shot up 9% in the final hour of trading. Rockhopper, a fellow Falkland Island oil company, was up 14% for the day. Both of these rises were on no news, which leads me to believe there has been a news leak somewhere along the chain. I am now up 9% on this stock, and will be looking for an RNS on Monday. If there is no news forthcoming I may dump the shares.

Stirling have announced the planned sale of it's US assets for $150mn, which is more than the value of all their stock listed in London. These funds will wipe out their debts and provide capital for ventures elsewhere. The stock was up briefly but is now in the old range. Looking to sell soon.

Imperial Energy Corp is slowly, and I mean slowly, moving up. But these are dangerous times for the holder as these could plummet any time now.

I am also covering with interest the following stocks, whose patterns will be confirmed this week:
ARM, BKG, PMO.

SMDR, SDR, SOLA and VPC are still under watch pending some moves. VPC looks to have broken resistance and could be in for a very interesting few weeks.

You can check the charts of the other stocks at http://uk.finance.yahoo.com

Back to school tomorrow after the 2 week easter break, which sucks a bit. Been getting well into the stocks during the holidays - but also looking forward to getting back into a routine.

Anyway my internet was wrecked earlier today, so I was sitting around working on some capital management systems for trading. Nothing special, just devloping some financial rules for my portfolio and profit taking etc.

It's fast dawning on me that money management is just as important as the stocks themselves. Until now I've had no rules, which has really hampered my development as an investor.


My old rules/mistakes:

1. Pick stocks based on fundamental research, give the chart a glance with a very uneducated eye.

2. Don't set profit targets. I wanted as much as I could get, so wasn't happy unless the number was high.

3. Look at monetary gains over percentage gains. Big mistake!

4. No automated stop losses, which destroyed me on ASG and has led me to go long.. long.. longer on SEO.

5. Tying up my cash too quickly, and for too long.

6. Buying small holdings <£400, brokerage costs are just too much if it goes wrong, and often right!

7. Buying stocks based on them "looking good", and not trading the trends.

8. Cluttered trading journal getting confusing with so many stocks on watchlist etc.


So there's 8 parts of my game I have identified and am now currently working on stopping them out.


New rules for old mistakes:

10. Be realistic about the type of gains, and losses, that I can achieve.

9. Studying stocks thoroughly using in-depth technical analysis and my preferred indicators of MACD, RSI, EMAs, Stochastics. Then skimming over some fundamentals and research on what the company is doing, but focusing 90% on TA.

8. My technical analysis should provide me with sell indications just before or as the stocks run out of steam. I don't care if it's £5, £50 or £250, it's money in the bank if I sell it right there - allowing me to reduce my exposure.

7. Guaranteed stop losses as part of my trading strategy. Depending on the stock, they may be as tight as -3.5% to 7%. I will use trailing stop losses based on Parabolic SAR or EMA.

6. Wait for at least 3 signals before making a buy decision on a stock. I will also not buy a stock unless I have gone through it in detail on a yearly, monthly, weekly and daily basis and have checked all possible trends and resistance/support lines.

5. Invest >£1000 in each trade, unless a sell CFD. Reduces net purchase price per share, buy and sell targets met quicker.

4. For profitable trades, I will re-invest 35% into my trading account, and withdraw 75% of the profits as capital gains/petrol money.

3. Focus on a smaller number of shares each week and get a sounder understanding of their movements.

2. Buy UK300 companies or £50mn market cap stocks with >500,000 average volume per trading day. Liquidity, lower volatility and easier trend identification are 3 important new factors in my potential targets.

1. My number one rule: THE TREND IS YOUR FRIEND!


I will hopefully be able to integrate these new rules into my game quickly. Time will tell, but I will have to be commited to my rules and show no weakness in any trade, if it looks bad, get out - if the goings good, get out.

In other news, I continue, on paper at least, to indentify stocks due for losses much easier than those for gains. I have opened a paper account at IGindex.com, and I will begin to practice CFDs with play money later next week. Should I ever get into the Contract For Difference game, it will only be for shorting stocks, as I like to actually own stocks when I buy them. I will also try to pick <0.5% of stocks for this practice, as you really have to be right to get any gains. I will use ultra-tight stops on CFDs. They offer a good opportunity to gain exposure to money using 10% of the capital it would cost to own the stock outright. However, you can lose a hell of a lot more by the looks of things. Anyway, I figure £1000 in a CFD account, looking for initial margins of around 50 with a 2 CFDs at a time could be ok.. Anyway, I will treat the 100k like it was 1k and divide all gains by 100 to give me an indication of how I'm doing.

More TA, this time featuring the predicted misfortunes of Morgan Crucible (MGCR) and Aberdeen Asset Management (ADN).

First up MGCR:First I'll say that this is in an upward trend, so the predicted downturn won't last much longer (I guesstimate around 4 weeks). This will creep down until it hits the lower trend line and then bounce back up. By my amateur and unbackupable calculations, the buy range will be 202-210 around May 5th. Buy then and wait for continuation of the upward trend, to around a price of 255-265.

ADN:
No denying the downward trend on this one, but there are some interesting chart formations on this one. First up is a double bottom quickly followed by a double top which has failed the downward resistance and receeded nicely. This will go down, it's just a case of waiting for the right signals, as there is some forming support at 117, which will be above the support of the downward trend. Also, the RSI indicates a sale, which is much quicker than MACD and the moving average cut through from a few days ago. This will be interesting to watch.

I did these charts last night, this morning the stocks have done the following:
MGCR: -3.36%
ADN: -2.08%

As an interesting side note, VPC is down 3.32% this morning, indicating that it failed confirmation of the resistance break set at circa 658 and has settled currently at 640 pending further movement. I do still have a good opinion of this stock despite the retracement today and will wait for another signal before I buy into it.

Also a postscript from last weeks TA on SHI, CHTR, INVP, BLT (I've covered VPC). I predicted downward movement from SHI and CHTR, up on INVP and BLT:

SHI was 875, now 850 so good
CHTR was 857, now 850 but on the up, so ok
INVP was 380, now 380, also up and down, so not good, it hit 390 and went down at resistance
BLT was 1550, now 1650, so pretty good

I have also learned to be more patient when looking at a potential stock, hindsight is 20:20, but I will buy off 3 or 4 signals instead of just thinking, "hey, that's a good price". I'm also looking for simple chart and trend patterns that catch my eye straight away.

It's sad but I'm all about TA, here's some analysis of my current "would love to own right now" stock, VPC.
Yet again blogger sucks again with image quality, which is something I'll have to work on. Anyway, trend spotting all over that one. Double top, went down, set new low support, rallied back up but broke that trend, then formed a double bottom. I'm expecting this to get back to around the point of resistance set after the big drop.

I watched quite a lot of videos last night on technical analysis - mostly from informedtrades.com and alphatrades.net. They were very interesting and insightful, and at the moment I'm a little shocked at my earlier trading tactics. From now on I will definately be mostly technical analysis with only a little fundamentals. The tutorials I watched more specifically were MACD, RSI, Bollinger Bands, Parabolic SAR with a few also on trend spotting and moving averages.

The guy from informed trades recommends a program called ProRealTime, which is an analysis suite which you can use for free with end of day data. The charting is a lot better on this than at iii or on QuoteStream so I'll scan these at the end of day looking for some signals.

Anyway, I have a look through last night and tried to put what I had learned into practice and picked out 5 stocks that stood out more than the others. They were SHI, BLT, CHTR, VPC and INVP. SHI and CHTR looked like they were in for a fall, so I thought that I'd watch for a drop in those today. I will start to CFD stocks going down as for me it's easier to see potential downward movement rather than upward.

INVP, VPC and BLT looked like they were in for some bullish behaviour this morning. VPC in particular looked quite good as it crossed all but one box on my criteria - the MA. Anyway here they are at the moment:

SHI -2.15%
CHTR -1.22%
BLT +1.64%
VPC +1.51%
INVP -0.72%

INVP had some decent movement up at the start but it's looking weak so my analysis didn't work for that so obviously some more work needed. I'm pleased with how the other 4 look and I'm looking for some continuation on those tomorrow.

I applied the same analysis to my portfolio of DES, SEY, IEC, RWA and SEO. I bought IEC yesterday after it dropped 25% - which I thought was a little overdone. It's up around 4% today so far so hopefully it's a gap closer and I can make a decent short term profit.

2 stocks on the list were decent enough to look at: SEY and RWA. SEY looked had some strong signals for a reversal, and it's up 10% today. RWA looks pretty bad I must admit, and it's declined steady throughout today to -5.81%. I will be out if it breaks -6.5%, but I would like to see what happens with it, as "the trend is your friend" and generally speaking this is in a good but slow upwards trend and has been for quite a while after a big drop earlier in the year.

Brokerage fees are my main nemesis at the moment, and I'm looking to cut down on them. I think I will group my cash together after I exit some trades and trade off that, instead of having fewer and smaller holdings. Also, by spotting potential reversals for downward movement, I might start trialing CFDs on paper with a view to using them later in the year.

Not what you think - technical analysis. Been doing a lot more charting stuff lately as I've just signed up for streaming L2 market depth on iii.co.uk. It's brilliant to sit and watch the movement of stocks, as you can make better calls when you're live. Anyway, I read a charting book so have started some very amateur technical analysis.

My brother is all about TA and won't even sit down to read a report. But Warren Buffet and Peter Lynch don'tlook at charts, they are fundamentalists which is what I have been up to this point. I do like TA but I just think it has to back it up with either strong balance sheets, good products, contract wins or a booming sector. My stock picks were ratio searches, followed by fundamental research and then looking at the chart. At the moment it's based on RNS>chart>balance sheet, but only because I've got level 2.

Anyway, like I keep saying I really really (..like for real really) hate not having cash at disposal when you're sitting watching the market. It's all tied up still in stocks I've bought a few weeks ago that just mosey along, which is fine really so long as they move north. Anyway, I realised Tullow might not have been such a good buy at the moment and sold out for a £20 loss and had a look around the markets.

I've started to check market losers instead of gainers now, because more often than not, in the next day or two they're on the market gainers list. One company was down 25% today despite a 62.5% profit growth on the last year, the market depth was good: 3:1 buys vs sells and constantly ticking up so I figured I'd buy that just to see what happens really. Strong fundamentals and they've arranged for some funding, just hope the debt levels reduce and they get some revenue in the next few months. Oh it's Imperial Energy Corp - IEC.

Anyway, I did some (if you know anything about TA you will say "..some bad") TA for Savills (SVS), Vectura (VEC) and Bowleven (BLVN). On paper I love Savills and Bowleven, my brother pointed me towards Vectura after some heatmap analysis.

BLVN.. wow I just realised how crap images look on blogger..
Well because it's all distorted I guess you can barely see the 3 little coloured squares giving my buy/sell indicators. Anyway it's in the top and black bottom line in an upward trend, but there is also a second support resistance line (the grey one). The red line indicates recent resistance. I did it last night with the blue square meaning buy if it goes above, points along the top black line are sell indicators and if it bounces off the purple square and passes the red line - definate buy. Anyway today it's above the recent resistance (buy signal) and I'm going to see if it hits the upward trend line.

SVS
This is a little simpler, seems to have established an uptrend in a definite little channel there, but has encountered historial resistance (red line). It bounces back to the bottom trend line and then makes another move. The blue square is a buy, as it represents the lowest buying price in the trend, purple square is indicative of a resistance break and possible new support line towards the top trend line. The yellow square indicates a possible break, if not, then open a CFD until it retraces to the support line - or if it fails that, the lower trend line.


VEC
Really simple here, stock is really low compared to past prices, looks to be on sale. It's broken out of its downtrend and has made a short burst upwards along 2 trend lines (the thin one also lines up with the big red candlestick). The squares are self explanatory this time because you can read it. Today VEC hit the blue square indicator, indicating it is looking to break the resistance and find some new support at that price.

OEX
This is just for a laugh. My brother keeps harping on about Oilex being a crap company - but going by independent research, contracts and prospects, this stock has great potential over the long term (18 months+), especially if you can get in at the support at 56. I did this graph in about 2 seconds, and I'm not even sure you can call it TA except for the resistance at 6 and formation of an upward trend in the past 2 weeks. The one problem with OEX is the total and blatant resistance at 60. This was 2 days ago, and the stock is still below resistance, but interestingly still on the last upward trendline in the wedge - indicating to me that there is interest in the stock, just nobody wants to make a move. I'm waiting firstly for continuation of the lower upward trend, followed on a break of 60 which would indicate a buy.

Also, as I write this IEC continues to recover on L2.